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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Acknowledgments
Thanks to the Editor and two anonymous referees, Marlies Ahlert, Salvatore Capasso, and participants at the seminars held at University of Catania, First Annual Conference of Italian Society of Law and Economics (ISLE), Siena (Italy), November 25–27, 2005, and Annual Workshop of the European Master Program in Law and Economics at the University of Hamburg, Hamburg, Germany, February 10, 2006, for their invaluable suggestions and comments on a previous draft of this paper. All remaining errors are the responsibility of the author.
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Di Vita, G. A note on exogenous changes in incentives for and deterrence of corruption. Eur J Law Econ 24, 15–27 (2007). https://doi.org/10.1007/s10657-007-9019-5
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DOI: https://doi.org/10.1007/s10657-007-9019-5