 Capital and Crime–Corruption Nexus in the Shadow of the Law: A Theoretical Analysis of Public PolicyRohan Kanti Khan, Sushobhan Mahata and Ranjanendra Narayan Nag Public Finance Review, 2024, vol. 52, issue 6, 791-825 Abstract: Corruption is a symptom of wider political dynamics intertwined with sectors prone to criminal activities. This arises due to the laxity of legal enforcement or a dysfunctional political system. This paper analytically demonstrates the nexus between organized crime and corruption in the presence of the public sector. The relevant questions at this juncture are: (i) How does capital investment in the industrial sectors affect the crime–corruption nexus? (ii) Why a more stringent law-and-order enforcement may produce counterproductive outcomes? and (iii) Whether the creation of alternative income opportunities in the legally approved sectors by the government will lower corruption and decriminalize society? What we will try to show is that when corruption becomes necessary to sustain the criminal sector, capital expansion and deterrence policy augment crime and corruption. This crucially depends on a multitude of general equilibrium factors including the labor relocation effect, capital relocation effect, and factor intensity of sectors. Keywords: crime; corruption; capital; general equilibrium; public policy; JEL codes:; D50; K42; H39 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:52:y:2024:i:6:p:791-825 DOI: 10.1177/10911421221127098 Access Statistics for this article More articles in Public Finance Review |
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