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Private enforcement, corruption, and antitrust design

Peter Grajzl () and Andrzej Baniak

Journal of Comparative Economics, 2018, vol. 46, issue 1, 284-307

Abstract: We examine how the rationale for enabling versus precluding private antitrust enforcement depends on whether antitrust enforcement is corruption-free or plagued by corruption. Corruption in courts affects the incentives to bring forth private antitrust lawsuits. This, in turn, along with corruption in antitrust agency enforcement, alters the incentives to commit antitrust violations. The social welfare effect of enabling private antitrust enforcement in the presence of corruption depends on whether corrupt officials in the ensuing bribery contests favor a particular firm and if so which one and to what extent. Under some circumstances, corruption actually increases the social desirability of private antitrust enforcement relative to the no-corruption scenario. Our analysis highlights that the effects of a given legal arrangement for antitrust enforcement critically depend on the corruption environment and, thus, that the appropriate design of antitrust institutions is context-specific.

Keywords: Antitrust; Corruption; Private enforcement; Public enforcement; Institutional design (search for similar items in EconPapers)
JEL-codes: K21 L40 H11 P51 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Private Enforcement, Corruption, and Antitrust Design (2015) Downloads
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