Organized Crime, Corruption and Punishment

Maurice Kugler (), Thierry Verdier and Yves Zenou

No 600, Working Paper Series from Research Institute of Industrial Economics

Abstract: We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficiently well-paid, difficult to bribe and corruption detection highly probable, we show that increasing policing or sanctions effectively deters crime. However, when bribing costs are low, that is badly-paid and dishonest law enforcers work in a weak governance environment, and the rents from criminal activity relative to legal activity are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. In particular, the relationship between the traditional instruments of deterrence, namely intensification of policing and increment of sanctions, and crime is nonmonotonic. Beyond a threshold, increases in expected punishment induce organized crime to corruption, and ensuing impunity leads too higher rather than lower crime.

Keywords: Deterrence; Organized Crime; Corruption; Oligopoly; Free Entry (search for similar items in EconPapers)
JEL-codes: K42 L13 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2003-10-21
New Economics Papers: this item is included in nep-law, nep-mfd and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Organized crime, corruption and punishment (2005)
Working Paper: Organized crime, corruption and punishment (2005)
Working Paper: Organized Crime, Corruption and Punishment (2003)
Working Paper: Organized Crime, Corruption and Punishment (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0600

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