Property in Bribes Revisited in a Cross-Disciplinary Perspective
38 Pages Posted: 8 Feb 2017
Date Written: February 8, 2017
Taking its point of departure from the decision in FHR European Ventures LLP v Cedar Capital Partners LLC, this article seeks to bring cross-disciplinary perspectives to bear on the question whether an agent should hold the bribe he has received on constructive trust for his principal. Two methods or models, the economising and the principal agent models, were employed. The results were at least three-fold. First, an effective legal rule responding to the problem of harm caused by corruption must recognise and take account of differences between competitive and non-competitive environments, auditing possibilities, as well as multiple causalities, both individual and institutional. Second, a property rule fails to do that. Third, ignoring such endogenous and exogenous variables, it overestimates or underestimates the harm suffered by victims of corruption.
Keywords: property rule, bribe, principal and agent, Calabresi and Melamed efficiency model, market efficiency, autonomy and accountability, principal agent model
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