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Self reporting reduces corruption in law enforcement

Alberto Motta () and Alfredo Burlando

MPRA Paper from University Library of Munich, Germany

Abstract: We consider a model of law enforcement where homogenous, risk neutral, and corruptible inspectors are responsible for monitoring citizens who may have committed criminal acts. A welfare maximizing, budget constrained government can implement appropriate wage policies to prevent collusion, but we find that governments characterized by high administrative costs in administrating fines, or by a low ability to spot and prosecute corruption, may prefer to let corruption happen. By allowing citizens to avoid all monitoring by reporting their own violations first, the government is able to increase welfare by hiring fewer inspector, and in some instances by shifting from a regime of corruption to a regime where there is none. Moreover, self reporting fully eliminates any deadweight losses that arise from the incentive schemes when inspectors are risk averse. In order for self-reporting to have these effects, it is necessary that the government maintains also an optimal incentive scheme for its inspectors.

Keywords: self reporting; corruption; collusion; law enforcement; wage policy; leniency program (search for similar items in EconPapers)
JEL-codes: K00 O10 (search for similar items in EconPapers)
Date: 2007-01-10, Revised 2007-06-23
New Economics Papers: this item is included in nep-law and nep-reg
References: View references in EconPapers View complete reference list from CitEc

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