When anti-corruption norms lead to undesirable results: learning from the Indonesian experience

This paper analyzes how and why adverse side-effects have occurred in the implementation of two articles of Indonesia’s anti-corruption law. These articles prohibit unlawful acts which may be detrimental to the finances of the state. Indeed, the lawmakers had good intentions when they drafted the two articles. They wanted to make it easier to convict corrupt individuals by lowering the standard of evidence required to prove criminal liability. The implementation of these articles has raised legal uncertainty. The loose definition of the elements of the crime enables negligence and imperfection of (public) contracts to be considered as corruption. The Constitutional Court has issued two rulings to restrict and guide the interpretation of these articles. However, law enforcement agencies (Supreme Court and public prosecutors) have been unwilling to adhere to the rulings. There are two possible reasons for this. First, as has been argued by several commentators, the law enforcement agencies have misinterpreted the concept of “unlawfulness”. Besides, the law enforcement agencies wish to be seen to be committed to prosecuting and delivering convictions in corruption cases. To do so, they need to maintain looser definitions of the elements of the offence. This paper endorses the Constitutional Court rulings and provides additional reasons in support of their stance. The paper can be considered as a case study for other countries that may be contemplating similar legislation.     

Intermediate sanctions flow charts

In this Article, the author presents and explains two flow charts that facilitate the analysis of the intermediate sanctions provisions. The first chart guides one in determining whether a particular transaction is subject to the sanctions. The second assists in calculating the monetary amount of any applicable sanction.     

Alternative sanctions: myth and reality

For this study the author has reviewed 134 documents from 12 western countries: the US, Canada, Australia, New Zealand, England, Scotland, Sweden, Finland, Norway, Germany, Austria and France. The documents include the research literature as found in the RDC documentation department and documents obtained by writing to official authorities.     

Civil and criminal sanctions against blackmail: an economic analysis

The rationale behind the legal prohibition of blackmail and its effects have worried lawyers, economists and philosophers. The paper tries to offer a new perspective on the issue by introducing a simple game-theoretic model of the blackmail interaction under three alternative legal regimes: blackmail as a legally enforceable contract, blackmail as a voidable contract, and criminal blackmail. We show that the first two are substantially equivalent, and are unable to prevent a successful blackmail equilibrium outcome. Making blackmail a crime can instead alter this result for some parameters of the model.We also explore the justification for criminalizing blackmail and find it, in line with previous Law and Economics literature on blackmail (Ginsburg and Shechtman (1993), Coase (1988)), in the correction (albeit incomplete) of misaligned incentives to acquire information and the revelation and no revelation outcomes involved in the blackmail transaction. This justification could be undermined by the advantages of what seems to be a superior legal regime in terms of efficiency: no legal regulation of blackmail. This hands-off system can also destabilize, in a one-shot interaction, the successful blackmail outcome. In plausible dynamic interactions, however, it fails to do so and, in fact, its effects actually resemble those of blackmail as an enforceable contract. This result might explain why most legal systems stick to the criminalization of blackmail.     

Deterrence and tax treatment of monetary sanctions and litigation costs

The tax treatment of monetary sanctions and litigation expenditures varies across legal jurisdictions and time. The effects of these different tax regimes – particularly, on crime deterrence – have not been fully explored. Instead, legal intuitions in court decisions and legislative reforms are found. This paper explores the effects of these tax regimes. It shows that our common intuitions are sometimes misguided, since we tend to ignore cross-effects between crime and litigation. For example, contrary to commonly held views, it is shown that non-deductibility of monetary sanctions may increase the level of crime, if litigation expenses are deductible. In addition, if deductibility of legal expenses depends only on a successful trial outcome, this may also increase amounts spent on litigation and time allocated to crime. As this paper shows, however, a complete deductibility regime, under which both monetary sanctions and litigation expenditures are deductible, maintains the pre-tax levels of crime and litigation expenditures for risk-neutral offenders. The paper further explores the effects of different tax reforms.     

The market for social norms

This article presents a semirigorous model in which a new normarises out of the workings of a market for norms. Change istriggered by a shift in either cost-benefit conditions or groupcomposition. Because individuals are heterogeneous in importantrespects, they respond differently to these triggering events.The first persons to supply new norms generally are individualswho have either superior technical knowledge of cost-benefitconditions, superior social knowledge of group dynamics, orspecial endowments that provide them with unusually high tangiblebenefits from norm reform. Members of the social audience observethe competing efforts of these norm suppliers and reward themost meritorious ones by conferring on them either esteem or,according to an alternative conception, new exchange opportunities.Under optimal conditions, members of the audience - key participantsin the demand side of the market for norms - do not free-ridebecause they incur no net costs when conferring their rewards.     

The fairness of sanctions: some implications for optimal enforcement policy

In this article we incorporate notions of the fairness of sanctionsinto the standard model of public enforcement. When both theprobability and magnitude of sanctions may be varied, the usualsolution involves a very high sanction and a relatively lowprobability of enforcement if individuals are risk neutral.When the issue of fairness is added to the analysis, the optimalsanction generally is not extremely high because such a sanctionwould be seen as unfair. The optimal probability of imposingsanctions may be higher than in the usual case (to offset thelower sanction) or lower than in the usual case (because thelower sanction reduces the effectiveness of enforcement).     

A dutch perspective on some of the effects of alternative sanctions

The central theme is the developmental process of alternative sanctions in the Netherlands. Starting-point is the increasing crime rate, especially in the field of juvenile delinquency. At the same time it is clear that the traditional sanctions are not effective. That creates a need of alternative sanctions. The author developed criteria for these sanctions and besides applied these as an experiment in the field of juvenile vandalists in public transport. As a consequence of the positive evaluation the alternative sanctions were institutionalised in the Netherlands by way of the installation of HALT offices in every city.     

First-time DWI offenders are at risk of recidivating regardless of sanctions imposed

Objective

Research demonstrates that punitive approaches to DWI employed by the judiciary have failed to significantly reduce recidivism. However, little is known about the deterrent effects of administrative and diversion sanctions. We examine whether such sanctions deter first-time DWI offenders.

Methods

We grouped combinations of administrative, judicial, and diversion sanctions routinely employed in the state of Maryland for processing drivers arrested for DWI into one of eight mutually exclusive disposition sequences. We applied this classification to Maryland drivers who had been licensed in the state and had precisely one DWI on their record prior to January 1, 1999. We then used a proportional hazards model to estimate the probability of remaining free of a new DWI during a 6-year period (January 1, 1999 - December 31, 2004) as a function of the disposition of the index violation, and of selected factors that could affect that probability.

Results

Drivers with a prior DWI were at relatively high risk of recidivating regardless of how they were sanctioned. Those who received administrative and alternative sanctions had a risk of recidivating similar to that of drivers who were convicted.

Conclusion

All dispositions sequences, not just convictions, indicate that first-time DWI offenders are at high risk of recidivating.