DP9543 Accomplice-Witness and Organized Crime: Theory and Evidence from Italy
|Author(s):||Antonio Acconcia, Giovanni Immordino, Salvatore Piccolo, Patrick Rey|
|Publication Date:||July 2013|
|Keyword(s):||Accomplice-witness, Criminal Organizations, Leniency, Whistleblowing|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=9543|
We develop an agency model of organized crime accounting for the main trade-offs involved by the introduction of an accomplice-witness program. We characterize the optimal policy and identify its main determinants in a framework where public officials can be dishonest. Our predictions are tested by using data for Italy before and after the introduction of the 1991 accomplice-witness program. As predicted by the model and the earlier antitrust literature, the program appears to have strengthened deterrence and enhanced prosecution. Moreover, consistently with a novel prediction of our theory, the evidence suggests that the program efficacy is affected by the judicial system efficiency.