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Counterproductive Leniency Programs Against Corruption

Author

Listed:
  • Paolo Buccirossi

    (Laboratory of Economics)

  • Giancarlo Spagnolo

    (Stockholm School of Economics)

Abstract

The paper shows that fighting corruption with leniency programs -- reductions of the legal sanctions for wrongdoers who spontaneously report to law enforcers -- may be highly counterproductive. These programs are typically ``moderate,'' in the sense of only reducing, or at best cancelling the sanctions for the reporting party. Moderate leniency programs may be too weak to deter long-run corrupt relations and, as it turns out, provide an effective enforcement mechanism for other forms of corruption, one-shot and infrequent corrupt transactions, which would be unenforceable (and therefore absent) otherwise.

Suggested Citation

  • Paolo Buccirossi & Giancarlo Spagnolo, 2000. "Counterproductive Leniency Programs Against Corruption," Econometric Society World Congress 2000 Contributed Papers 1311, Econometric Society.
  • Handle: RePEc:ecm:wc2000:1311
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    References listed on IDEAS

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    1. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-159, January.
    2. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
    3. Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
    4. Simon Johnson & John McMillan & Christopher Woodruff, 1999. "Property Rights, Finance, and Entrepreneurship," CESifo Working Paper Series 212, CESifo Group Munich.
    5. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W., 1997. "Privatizing Russia," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522284, November.
    6. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
    7. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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    Cited by:

    1. Silvinha Pinto Vasconcelos & Francisco de Sousa Ramos, 2005. "Design De Contratos Pela Autoridade Antitruste: O Caso Do Mecanismo De Cessação De Práticas Anticompetitivas (Ccp)," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 094, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

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