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Organised crime, corruption and punishment

Organised crime, corruption and punishment
Organised crime, corruption and punishment
We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. 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 are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. Indeed, beyond a threshold, further increases in intended expected punishment create incentives for organized crime to extend corruption rings, and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime.
deterrence, organized crime, corruption, oligopoly, free entry
1639-1663
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 (2005) Organised crime, corruption and punishment. Journal of Public Economics, 89 (9-10), 1639-1663. (doi:10.1016/j.jpubeco.2004.05.005).

Record type: Article

Abstract

We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. 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 are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. Indeed, beyond a threshold, further increases in intended expected punishment create incentives for organized crime to extend 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: 2005
Keywords: deterrence, organized crime, corruption, oligopoly, free entry

Identifiers

Local EPrints ID: 34585
URI: https://eprints.soton.ac.uk/id/eprint/34585
PURE UUID: 8353ffa0-afd3-4048-8337-6267b2849cf2

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Date deposited: 15 May 2006
Last modified: 26 Feb 2019 17:31

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Contributors

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

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