SSE/EFI Working Paper Series in Economics and Finance
No 456:
The Effects of Leniency on Illegal Transactions: How (Not) to Fight Corruption
Paolo Buccirossi ()
and Giancarlo Spagnolo ()
Abstract: We study the consequences of 'leniency' - reduced legal
sanctions for wrongdoers who spontaneously self-report to law enforcers -
on corruption, drug dealing, and other forms of sequential, bilateral,
illegal trade. We find that when not properly designed, leniency may be
highly counterproductive. In reality leniency is typically "moderate," in
the sense of only reducing, or at best cancelling the sanctions for the
self-reporting party. Moderate leniency may greatly facilitate the
enforcement of long-term illegal trade relations, and may even provide an
effective enforcement mechanism for occasional (one-shot) illegal
transactions, which would not be enforceable otherwise.
Keywords: Law enforcement; Self-reporting; Corruption; Crime; Illegal trade; Drug dealing.; (follow links to similar papers)
JEL-Codes: K00; K21; K42; (follow links to similar papers)
31 pages, July 31, 2001
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