Table of Contents

Corruption

Corruption

Economic Analysis and International Law

Marco Arnone and Leonardo S. Borlini

Corruption presents many legal and regulatory challenges, but these challenges cannot be met by the law in isolation. This book presents economic analysis of crime as an essential tool for shaping an effective legal apparatus. The authors contend that in order to assess whether and how to regulate corruption, it is necessary to start with a thorough inquiry into the causes, institutional and social effects, and most of all, actual and potential economic and financial consequences of crimes. This, they argue, should inform and help shape a balanced legal and regulatory approach to corruption.

Chapter 1: Opening remarks: corruption and economic analysis

Marco Arnone and Leonardo S. Borlini

Subjects: economics and finance, economic crime and corruption, law - academic, comparative law, corruption and economic crime, international economic law, trade law

Extract

The first scholarly research into the causes and the consequences of corruption date back several decades. Scott's (1972) seminal work on political corruption, for example, dealt with a wide array of aspects of corruption. Until the 1980s, however, academic research on corruption was mostly confined to the domains of sociology, political science, history, public administration, criminal law, and criminology. Campos and Bhargava (2007a), who have reviewed the evolution of the economic analysis of corruption, emphasize that the earlier systematic studies on the economics of corruption, although extensive and enlightening, were weak on measurement and quantification. The raw material for those studies largely relied on journalism to supply the facts and their results, because there were no statistical efforts to measure the harm caused by corruption. The closest were studies by Krueger (1974) and Bhagwati (1982) that attempted to provide a cautious measure of the volume of rent-seeking and illegal transactions in international trade by making use of the two sets of books available internationally in exporting and in importing countries. Then some authors argued that there was a rather limited quantity of definitive economic analysis. Sanchez and Waters (1974: 249) explained the scarcity of definitive economic studies regarding the impact of corruption on economic performance, suggesting that: "corruption is like sex was in Victorian England: it absorbs intense activity and is the subject of much speculation, but it is seldom considered a suitable topic for serious economic analysis."