Law Enforcement and Transition

Gérard Roland and Thierry Verdier

No 262, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: We present a simple model to analyze law enforcement problems in transition economies. Law enforcement implies coordination problems and multiplicity of equilibria due to a law abidnce and a fiscal externality. We analyze two institutional mechanisms for solving the coordination problem. A first mechanism is what we call "dualism", follows the scenario of Chinese transition where the government keeps direct control over economic resources and where a liberalized non state sector follows market rules. The second mechanism we put forward is accession to the European Union. We show that accession to the European Union, even without external borrowing, provides a mechanism to eliminate the "bad" equilibrium, provided the "accesing" country is small enough relative to the European Union. Interestingly, we show that accession without conditionality is better than with conditionality because conditionality creates a coordination problem of its own that partly annihilates the positive effects of expected accession.

Keywords: law enforcement; government collapse; mafia; EU accession; dual track liberalization (search for similar items in EconPapers)
Pages: pages
Date: 1999-05-01
New Economics Papers: this item is included in nep-law, nep-mfd and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp262.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp262.pdf [302 Found]--> https://wdi.umich.edu/files/Publications/WorkingPapers/wp262.pdf)

Related works:
Journal Article: Law enforcement and transition (2003)
Working Paper: Law Enforcement and Transition (2000)
Working Paper: Law Enforcement and Transition (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:1999-262

Access Statistics for this paper

More papers in William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109. Contact information at EDIRC.
Bibliographic data for series maintained by WDI (wdi@umich.edu).