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Journal Articles Journal of Public Economics Year : 2005

Organized crime, corruption and punishment


We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. When bribing costs are low, that is badly-paid and dishonest law enforcers work in a weak governance environment, and the rents from criminal activity are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. Indeed, beyond a threshold, further increases in intended expected punishment create incentives for organized crime to extend corruption rings, and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime.

Dates and versions

halshs-00754068 , version 1 (20-11-2012)



Maurice Kugler, Thierry Verdier, Yves Zenou. Organized crime, corruption and punishment. Journal of Public Economics, 2005, 89 (9-10), pp.1639-1663. ⟨10.1016/j.jpubeco.2004.05.005⟩. ⟨halshs-00754068⟩
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