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Corruption and Private Law Enforcement: Theory and History

Author

Listed:
  • Garoupa Nuno

    (University of Illinois College of Law USC Law School)

  • Klerman Daniel M.

    (University of Illinois College of Law USC Law School)

Abstract

This article analyzes private law enforcement in an environment with corruption. The effect of corruption is studied both under the assumption of monopolistic enforcement by a single private enforcement agency and under the assumption of competitive enforcement by many private enforcers. In addition, the model takes into account the different objectives of a benevolent, social-welfare-maximizing group and a self-interested, rent-seeking group, as well as the possibility of a government divided between welfare-maximizing and rent-seeking groups. Among the central results of the paper are (1) corruption is especially problematic under monopolistic enforcement, (2) when governmental decision making is divided, a rent-seeking group which is unable to control the level of fines and rewards usually prefers monopolistic to competitive enforcement. The article demonstrates the plausibility and relevance of the model by examining corruption and private law enforcement in pre-modern England.

Suggested Citation

  • Garoupa Nuno & Klerman Daniel M., 2010. "Corruption and Private Law Enforcement: Theory and History," Review of Law & Economics, De Gruyter, vol. 6(1), pages 75-96, April.
    • Handle: RePEc:bpj:rlecon:v:6:y:2010:i:1:n:3
    DOI: 10.2202/1555-5879.1394
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    References listed on IDEAS

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Ekelund, Robert B. & Dorton, Cheryl, 2003. "Criminal justice institutions as a common pool: the 19th century analysis of Edwin Chadwick," Journal of Economic Behavior & Organization, Elsevier, vol. 50(3), pages 271-294, March.
    3. Bowles, Roger & Garoupa, Nuno, 1997. "Casual police corruption and the economics of crime," International Review of Law and Economics, Elsevier, vol. 17(1), pages 75-87, March.
    4. Nuno Garoupa & Daniel Klerman, 2002. "Optimal Law Enforcement with a Rent-Seeking Government," American Law and Economics Review, American Law and Economics Association, vol. 4(1), pages 116-140, January.
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    Citations

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    Cited by:

    1. Coşgel, Metin M. & Etkes, Haggay & Miceli, Thomas J., 2011. "Private law enforcement, fine sharing, and tax collection: Theory and historical evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 546-552.
    2. Arguedas, Carmen & Earnhart, Dietrich & Rousseau, Sandra, 2013. "Effluent Limits, Ambient Quality, and Monitoring," Working Papers in Economic Theory 2013/08, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    3. Larcom Shaun & Swanson Timothy, 2015. "Documenting Legal Dissonance: Legal Pluralism in Papua New Guinea," Review of Law & Economics, De Gruyter, vol. 11(1), pages 25-50, March.
    4. Garoupa, Nuno & Klerman, Daniel, 2004. "Corruption and the optimal use of nonmonetary sanctions," International Review of Law and Economics, Elsevier, vol. 24(2), pages 219-225, June.
    5. Carmen Arguedas & Dietrich Earnhart & Sandra Rousseau, 2017. "Non-uniform implementation of uniform standards," Journal of Regulatory Economics, Springer, vol. 51(2), pages 159-183, April.
    6. Yahagi, Ken, 2021. "Law enforcement with motivated agents," International Review of Law and Economics, Elsevier, vol. 66(C).
    7. Cooter Robert D. & Garoupa Nuno, 2014. "A Disruption Mechanism for Bribes," Review of Law & Economics, De Gruyter, vol. 10(3), pages 241-263, November.
    8. Zhiyong (John) Liu & Zhewei Wang & Zhendong Yin, 2022. "When is duplication of effort a good thing in law enforcement?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(4), pages 682-708, August.
    9. Nuno Garoupa & Mohamed Jellal, 2007. "Further notes on information, corruption, and optimal law enforcement," European Journal of Law and Economics, Springer, vol. 23(1), pages 59-69, February.
    10. Salvatore Capasso & Rajeev K. Goel & James W. Saunoris, 2019. "Is it the gums, teeth or the bite? Effectiveness of dimensions of enforcement in curbing corruption," Economics of Governance, Springer, vol. 20(4), pages 329-369, December.
    11. Robson Fernandes Soares & Edson Ronaldo Guarido Filho, 2021. "Anti-Corruption Enforcement and Organizations: A Narrative Review," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 25(6), pages 190149-1901.
    12. Ken Yahagi, 2018. "Private law enforcement with competing groups," Economics of Governance, Springer, vol. 19(3), pages 285-297, August.

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