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Legal Standards, Enforcement, and Corruption

Giovanni Immordino () and Marco Pagano ()

Journal of the European Economic Association, 2010, vol. 8, issue 5, 1104-1132

Abstract: Stricter laws require more incisive and costlier enforcement. Because enforcement activity depends both on available tax revenue and the honesty of officials, the optimal legal standard of a benevolent government is increasing in per capita income and decreasing in officials' corruption. In contrast to the "tollbooth view" of regulation, the standard chosen by a self-interested government is a non-monotonic function of officials' corruption, and can be either lower or higher than that chosen by a benevolent regulator. International evidence on environmental regulation shows that standards correlate positively with per-capita income, and negatively with corruption, consistent with the model's predictions for benevolent governments. (JEL: D73, K42, L51) (c) 2010 by the European Economic Association.

JEL-codes: D73 K42 L51 (search for similar items in EconPapers)
Date: 2010
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Working Paper: Legal Standards, Enforcement and Corruption (2009) Downloads
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