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Organised crime, corruption and punishment

Organised crime, corruption and punishment
Organised crime, corruption and punishment
We analyse an oligopoly model in which differentiated criminal organisations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficiently well-paid, difficult to bribe and corruption detection highly probable, we show that increasing policing, or sanctions, effectively deters crime. However, when bribing costs are low, that is badly-paid and dishonest law enforcers work in a weak governance environment, and the rents from criminal activity relative to legal activity are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. In particular, the relationship between the traditional instruments of deterrence, namely intensification of policing and sanctions, and the crime rate is nonmonotonic. Beyond a threshold, further increases in intended expected punishment create incentives for organised crime extending corruption rings, and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime.
intended deterrence, organised crime, weak governance, corruption
407
University of Southampton
Kugler, Maurice
4c79c98c-1810-4351-bf16-faeec2227e45
Verdier, Thierry
87c483ea-f473-408f-9776-d0381cab6454
Zenou, Yves
f7c3b72f-b6b6-4550-8b0f-00a127af082e
Kugler, Maurice
4c79c98c-1810-4351-bf16-faeec2227e45
Verdier, Thierry
87c483ea-f473-408f-9776-d0381cab6454
Zenou, Yves
f7c3b72f-b6b6-4550-8b0f-00a127af082e

Kugler, Maurice, Verdier, Thierry and Zenou, Yves (2004) Organised crime, corruption and punishment (Discussion Papers in Economics and Econometrics, 407) Southampton. University of Southampton

Record type: Monograph (Discussion Paper)

Abstract

We analyse an oligopoly model in which differentiated criminal organisations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficiently well-paid, difficult to bribe and corruption detection highly probable, we show that increasing policing, or sanctions, effectively deters crime. However, when bribing costs are low, that is badly-paid and dishonest law enforcers work in a weak governance environment, and the rents from criminal activity relative to legal activity are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. In particular, the relationship between the traditional instruments of deterrence, namely intensification of policing and sanctions, and the crime rate is nonmonotonic. Beyond a threshold, further increases in intended expected punishment create incentives for organised crime extending corruption rings, and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime.

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Published date: 2004
Keywords: intended deterrence, organised crime, weak governance, corruption

Identifiers

Local EPrints ID: 33816
URI: http://eprints.soton.ac.uk/id/eprint/33816
PURE UUID: f3a30a0d-6984-45bd-9a51-be7d4b10a9ac

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Date deposited: 15 May 2006
Last modified: 15 Mar 2024 07:45

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Contributors

Author: Maurice Kugler
Author: Thierry Verdier
Author: Yves Zenou

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