Corruption and Private Law Enforcement: Theory and History

28 Pages Posted: 12 Jun 2009 Last revised: 17 Dec 2014

See all articles by Nuno Garoupa

Nuno Garoupa

George Mason University - Antonin Scalia Law School, Faculty

Daniel M. Klerman

University of Southern California Gould School of Law

Date Written: June 9, 2009

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 and Klerman, Daniel M., Corruption and Private Law Enforcement: Theory and History (June 9, 2009). 6 Review of Law & Economics 75-96 (2010); U Illinois Law & Economics Research Paper No. LE09-016; USC CLEO Research Paper No. C09-12; USC Law Legal Studies Paper No. 09-25. Available at SSRN: https://ssrn.com/abstract=1416958 or http://dx.doi.org/10.2139/ssrn.1416958

Nuno Garoupa (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

Daniel M. Klerman

University of Southern California Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States
213-740-7973 (Phone)
213-740-5502 (Fax)

HOME PAGE: http://weblaw.usc.edu/contact/contactInfo.cfm?detailID=227

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