Counterproductive Leniency Programs Against Corruption

Paolo Buccirossi and Giancarlo Spagnolo
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Paolo Buccirossi: Laboratory of Economics

No 1311, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: The paper shows that fighting corruption with leniency programs -- reductions of the legal sanctions for wrongdoers who spontaneously report to law enforcers -- may be highly counterproductive. These programs are typically ``moderate,'' in the sense of only reducing, or at best cancelling the sanctions for the reporting party. Moderate leniency programs may be too weak to deter long-run corrupt relations and, as it turns out, provide an effective enforcement mechanism for other forms of corruption, one-shot and infrequent corrupt transactions, which would be unenforceable (and therefore absent) otherwise.

Date: 2000-08-01
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