Organized crime, corruption and punishment

Maurice Kugler, Thierry Verdier, Yves Zenou

Research output: Contribution to journalArticleResearchpeer-review

58 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)1639-1663
Number of pages25
JournalJournal of Public Economics
Volume89
Issue number9-10
DOIs
Publication statusPublished - 1 Sep 2005
Externally publishedYes

Keywords

  • Corruption
  • Deterrence
  • Free entry
  • Oligopoly
  • Organized crime

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