On the Nature of the Corrupt Firm: Where to Situate Liability?

Raphaela Seubert
Additional contact information
Raphaela Seubert: University of Passau, Germany

Law and Economics from University Library of Munich, Germany

Abstract: Applying the modern Property Rights Approach to depict employment and firm-internal delegation relationships, this paper addresses the question how to prevent corporate bribery. The analysis and the answers that follow take into account interaction effects between firm-internal delegation relationships, the possibly devilish side function of formal corporate ethics efforts (namely to shield firms or superiors from criminal accountability by shifting it onto their subordinate employees), the distribution of criminal liability, and the necessity for courts to rely on available evidence. From the simple theoretical framework, a bundle of implications follows: (1) conditions under which formal corporate ethics guidelines can take on a Janus-faced nature, i.e. lack credibility, (2) suggestions how firms can enhance the credibility of their corporate ethics efforts, (3) starts how to avoid the possible “second-order” lack of credibility of such credibility- enhancing measures, (4) clear-cut statements as to (a) where criminal liability should be situated within the firm and (b) how corporate and individual liabilities should be combined to both restrain corruption and to sustain the credibility of corporate ethics. These implications allow comparatively evaluating the effectiveness of international anti- corruption laws – specifically the desirability of corporate vs. personal criminal liabilities.

Keywords: Non-verifiable contracts; bribery; hard-copy evidence; delegation; mixed incentives; exit; voice; corporate ethics; all-for- one; victimize; Janus-faced; corporate liability (search for similar items in EconPapers)
JEL-codes: K42 L20 M12 M14 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2005-03-18
New Economics Papers: this item is included in nep-law and nep-reg
Note: Type of Document - pdf; pages: 38. 38 pages, pdf
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/le/papers/0503/0503002.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwple:0503002

Access Statistics for this paper

More papers in Law and Economics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).