DP9236 Legalizing Bribe Giving

Author(s): Martin Dufwenberg, Giancarlo Spagnolo
Publication Date: November 2012
Keyword(s): bribes, corruption, immunity, law enforcement, leniency, whistleblowers
JEL(s): D73, K42, O17
Programme Areas: Public Economics, Industrial Organization, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9236

A model of harassment bribes (paid for services one is entitled to) is developed and used to analyze the recent proposal to legalize paying bribes while increasing fines on accepting bribes. We explore performance as regards corruption deterrence and public service provision. A modified scheme, where immunity is conditional on reporting, addresses some key objections. We highlight complementarities with other policies aimed at improving accountability and performance of law enforcement agencies, and discuss the relevance for fighting other forms of corruption.