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Corruption, Organized Crime and the Bright Side of Subversion of Law

Astrid Gamba (), Giovanni Immordino () and Salvatore Piccolo ()

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: When Legislators award amnesties to “low-rank” criminals cooperating with the justice, top criminals may react by capturing public officials to subvert the law and avoid being sanctioned. Policies that optimally deter crime should anticipate this danger and fight it back by granting amnesties not only to low-rank criminals, but also to officials who plea guilty and report bribe- givers. Indeed, even if the threat of being betrayed by their fellows may induce top criminals to bribe prosecutors, these policies boost the conviction risk not only for top criminals but also for low-rank ones, whereby increasing the risk premium that the latter require to participate in the crime. This higher risk premium increases the reservation wage that top criminals need to pay in order to recruit soldiers, and hence reduces the crime profitability: the bright side of subversion of law.

Keywords: Criminal Organizations; Corruption; Leniency; Subversion of Law. (search for similar items in EconPapers)
JEL-codes: K14 K42 D73 D78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law and nep-net
Date: 2016-06-17
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Published in Journal of Public Economics, 2018, 159, pp.79-88.

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