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| Author: | Kugler, M. Verdier, T. Zenou, Y. |
| Title: | Organized crime, corruption and punishment |
| Journal: | Journal of Public Economics
2005 : SEP, VOL 89:9-10, p. 1639-1663 |
| Index terms: | Oligopoly Models Organizations Corruption Crime |
| Language: | eng |
| Abstract: | This paper analyzes an oligopoly model in which differentiated criminal (here as: cr-l.) organizations globally compete on cr-l. 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 cr-l. activity are sufficiently high, it is found 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 yielding more rather than less crime. |
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