Optimal Law Enforcement and Criminal Organization
Stanford Law School, Olin Law and Economics Working Paper No. 162 (also, Universitat Pompeu Fabra Economics Working Paper No. 366)
27 Pages Posted: 19 Apr 1999
Date Written: March 1999
In this paper, we take an organizational view of organized crime. In particular, we study the organizational consequences of product illegality attending at the following characteristics: (i) contracts are not enforceable in court, (ii) all participants are subject to the risk of being punished, (iii) employees present a major threat to the entrepreneur having the most detailed knowledge concerning participation, (iv) separation between ownership and management is difficult because record-keeping and auditing augments criminal evidence.
JEL Classification: K4
Suggested Citation: Suggested Citation