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Does it matter who extorts? Extortion by competent and incompetent enforcers

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  • Andrew Samuel
  • Ajit Mishra

Abstract

This paper offers a novel explanation for extortion, which is the practice of demanding payments from compliant agents by law‐enforcement officers. Namely, that extortion occurs due to the officer's incompetence, where the competence level is endogenous. Because competence improves enforcement, extortion affects deterrence directly by weakening agents' incentive to be compliant and indirectly by affecting officers' incentives to become competent. Accordingly, the harmful effects of extortion on deterrence depend on whether the competent or incompetent officer extorts. We show that extortion by incompetent officers is the lesser of the two evils, compared to bribery.

Suggested Citation

  • Andrew Samuel & Ajit Mishra, 2022. "Does it matter who extorts? Extortion by competent and incompetent enforcers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(3), pages 328-344, July.
    • Handle: RePEc:bla:scotjp:v:69:y:2022:i:3:p:328-344
    DOI: 10.1111/sjpe.12300
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    More about this item

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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