Thursday, March 24, 2011

Law for Sale -- or Corruptor's Revealed Preference

I think it is good to have competition amongst anti-corruption squads or law enforcers. Think this way: a corruptor can bribe the police, but, in competition, the general attorney office or KPK will still be more than willing to arrest him/her - and vice versa.

Now you may want to say: what if the corruptor bribe them all? It's possible, but at least it is now more expensive to do so than with single anti-corruption office. The competition raises the corruptor's cost of wrongdoing and make anti-corruption more efficient.

Better yet if we can somehow set an competitive auction mechanism in which police, general attorney office, and KPK can bid to arrest a corruptor and force this corruptor repay the certain amount of the state's loss, and the office proposing lowest operational budget would win.

Who's afraid of such competition (a.k.a the loser)? First, the one from less efficient office. Second, and the foremost, the operation target, that is the corruptor him/herself. The non-corruptor would have no objection about this.

Now, if you know someone fiercely takes troubles and makes a lot of fuss on this competition among anti-corruption agencies, you may ask yourself and be suspicious if he/she is either from the less efficient agency or Mr/Ms Corruptor him/herself.

We economist call it his/her revealed preference -- regardless her/his stated preference as self-proclaimed anti-corruption bravados.


  1. 1. what would be the incentive for bidding? (adding more work is certainly a disincentive, except if the case is a high profile one)
    2. what about the possible unintended consequences of more innocent people being charge with corruption or that anti corruption activities being used as a political tool?

  2. This bidding system would only work under the assumption that: (i) both law enforcers work in a professional and clean manner or both take bribes seriously; (ii) cases can be transferred between law enforcers (though it seems impossible with the double jeopardy rule).

    If not, one law enforcer can act as a save haven for the bad guys simply by ensuring the villains that their bribe will work and that they will be protected from the other law enforcer.

    I would think that's the case nowadays. And if it is true, it would be better to give incentives in the form of percentage of the recovered assets.

    You may notice that until today, most sanctions deal only with prison sanctions which are useless if the assets cannot be recovered. What's the use of sending the villains to the prison if they can always buy their freedom within it?