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Corruption, Organized Crime and the Bright Side of Subversion of Law

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Abstract

When Legislators award amnesties to “low-rank” criminals cooperating with the justice, top criminals may react by capturing public officials to subvert the law and avoid being sanctioned. Policies that optimally deter crime should anticipate this danger and fight it back by granting amnesties not only to low-rank criminals, but also to officials who plea guilty and report bribe- givers. Indeed, even if the threat of being betrayed by their fellows may induce top criminals to bribe prosecutors, these policies boost the conviction risk not only for top criminals but also for low-rank ones, whereby increasing the risk premium that the latter require to participate in the crime. This higher risk premium increases the reservation wage that top criminals need to pay in order to recruit soldiers, and hence reduces the crime profitability: the bright side of subversion of law.

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  • Astrid Gamba & Giovanni Immordino & Salvatore Piccolo, 2016. "Corruption, Organized Crime and the Bright Side of Subversion of Law," CSEF Working Papers 446, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:446
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    More about this item

    Keywords

    Criminal Organizations; Corruption; Leniency; Subversion of Law.;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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