Corruption and the Optimal Use of Non-Monetary Sanctions

25 Pages Posted: 11 Jul 2001 Last revised: 19 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 1, 2001

Abstract

This article presents a model of non-monetary sanctions with corruption. It is a well-known result in the law enforcement literature that in the absence of corruption, non-monetary sanctions, such as imprisonment, should be imposed infrequently. We show that, in the presence of corruption, it is still sometimes optimal to use non-monetary sanctions. In fact, it may be optimal to use them more often. Corruption transforms a non-monetary sanction into a monetary bribe. While this reduces deterrence, it also lowers the social cost of non-monetary sanctions, because they are seldom actually imposed. In addition, non-monetary sanctions can be beneficial in a corrupt environment, because they allow officials to extract higher bribes, thus restoring some deterrence.

Keywords: Non-monetary sanction, corruption

JEL Classification: K4

Suggested Citation

Garoupa, Nuno and Klerman, Daniel M., Corruption and the Optimal Use of Non-Monetary Sanctions (June 1, 2001). USC CLEO Research Paper No. C01-4; 24 International Review of Law & Economics 219-25 (2004); USC CLASS Research Paper No. 01-9. Available at SSRN: https://ssrn.com/abstract=276117 or http://dx.doi.org/10.2139/ssrn.276117

Nuno Garoupa

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

3301 Fairfax Drive
Arlington, VA 22201
United States

Daniel M. Klerman (Contact Author)

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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