A note on exogenous changes in incentives for and deterrence of corruption |
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Authors: | Giuseppe Di Vita |
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Institution: | (1) Faculty of Law, University of Catania, via Gallo n° 24, Catania, 95124, Italy |
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Abstract: | In this note we amend the model elaborated by Acemoglu and Verdier (2000, The American Economic Review, 90(1),194–211), to examine how agents respond to an exogenous change in incentives. In particular, we apply the theoretical
framework to the consequences on the corruption level in Italy of a famous sentence of the Italian Corte di Cassazione in
plenary session: in this sentence, no. 500 of 1999, a revolutionary interpretation of the law has increased the area of civil
liability for both the public administration and bureaucrats. This is one of the few cases in which the judge substantially
legislates in a system of civil law, and the modification in incentives towards or away from corruption comes from an authority that is not part of the game.
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Keywords: | Bureaucrats Corruption Government failure Incentives Market failure Public goods |
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