Stricter laws require more incisive and costlier enforcement. Because enforcement activity depends both on available tax revenue and the honesty of officials, the optimal legal standard of a benevolent government is increasing in per capita income and decreasing in officials’ corruption. In contrast to the “tollbooth view” of regulation, the standard chosen by a self-interested government is a non-monotonic function of officials’ corruption, and can be either lower or higher than that chosen by a benevolent regulator. International evidence on environmental regulation shows that standards correlate positively with per-capita income, and negatively with corruption, consistent with the model’s predictions for benevolent governments.
Legal Standars, Enforcement and Corruption
IMMORDINO, Giovanni;
2010
Abstract
Stricter laws require more incisive and costlier enforcement. Because enforcement activity depends both on available tax revenue and the honesty of officials, the optimal legal standard of a benevolent government is increasing in per capita income and decreasing in officials’ corruption. In contrast to the “tollbooth view” of regulation, the standard chosen by a self-interested government is a non-monotonic function of officials’ corruption, and can be either lower or higher than that chosen by a benevolent regulator. International evidence on environmental regulation shows that standards correlate positively with per-capita income, and negatively with corruption, consistent with the model’s predictions for benevolent governments.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
