By most measures, Hong Kong’s companies rank relatively poor in terms of adopting business measures aimed at preventing, detecting, and sanctioning corruption. Because Hong Kong anti-corruption law has focused on natural rather than legal persons, Hong Kong’s companies have hitherto had little incentive to adopt corporate policies and practices aimed at fighting corruption committed by its agents. In this brief, we argue that Hong Kong should adopt legal provisions similar to those in other upper-income countries (like the US, UK and Western Europe), which provide the incentives for companies to engage in some self-policing. Hong Kong law should penalise corporations for corruption committed by their agents. Such law should provide incentives for self-policing by offering limited relief from prosecution for companies which adopt generally effective, comprehensive and risk-focused anti-corruption programmes. Such law should introduce incentives for professional associations, business groups, accountants and other “stakeholders” to assist companies implement anti-corruption policies and practices. Corporate whistleblowing needs to be protected. We also recommend the restructuring of the ICAC’s Ethics Development Centre so can play a more effective role in helping companies adopt adequate anti-corruption measures.
{"title":"How Can the ICAC Help Foster the Wide-Spread Adoption of Company Anticorruption Programmes in Hong Kong?","authors":"Bryane Michael, I. Carr","doi":"10.2139/SSRN.2354619","DOIUrl":"https://doi.org/10.2139/SSRN.2354619","url":null,"abstract":"By most measures, Hong Kong’s companies rank relatively poor in terms of adopting business measures aimed at preventing, detecting, and sanctioning corruption. Because Hong Kong anti-corruption law has focused on natural rather than legal persons, Hong Kong’s companies have hitherto had little incentive to adopt corporate policies and practices aimed at fighting corruption committed by its agents. In this brief, we argue that Hong Kong should adopt legal provisions similar to those in other upper-income countries (like the US, UK and Western Europe), which provide the incentives for companies to engage in some self-policing. Hong Kong law should penalise corporations for corruption committed by their agents. Such law should provide incentives for self-policing by offering limited relief from prosecution for companies which adopt generally effective, comprehensive and risk-focused anti-corruption programmes. Such law should introduce incentives for professional associations, business groups, accountants and other “stakeholders” to assist companies implement anti-corruption policies and practices. Corporate whistleblowing needs to be protected. We also recommend the restructuring of the ICAC’s Ethics Development Centre so can play a more effective role in helping companies adopt adequate anti-corruption measures.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"109 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124230809","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the recent past, more countries are becoming vulnerable to the risks of money laundering and its contagious effects. According to the International Monetary Fund (IMF), the scale of money laundering globally could be between 2% and 5% of World Gross Domestic Product at the very lowest. This translates into a range of anything between US dollars 590 billion to USD 1.5 trillion of laundered money per year.The African region and indeed most of the developing countries are vulnerable to money laundering and terrorist financing particularly because of their cash-based and open economies. In Africa, this is further aggravated by the porous and weak controls at the borders.Combating money laundering and terrorist financing in these economies is further complicated by weak or ineffective regulation of financial institutions, lack of comprehensive legal framework, weak law enforcement agencies and poor coordination and collaboration between law enforcement agencies and financial regulatory bodies.Recent studies, including the ones carried out by the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) and the Financial Action Task Force (FATF), suggest that advances in technology and the progressive tightening of Anti-Money Laundering (AML) regulations are leading money launderers to make more complex arrangements outside the formal financial services industry, such as the use of various professional services, and in particular the real estate business, legal practitioners, tax consultants, chartered accountants and designated Non-Financial Institutions or sectors, such as the International football, casinos and gaming, hotels, supermarkets, dealers in luxury goods, cars and jewelry.It is against this background that this paper seeks to realize the following objectives: 1. To examine why and how is combating money laundering and financing of terrorism a top priority for the international community;2. To appraise the development and initiatives reflected in the legal and institutional frameworks in combating money laundering and financing of terrorism in Nigeria.3. To conclude with some recommendations.
{"title":"Appraisal of Legal, Regulatory and Institutional Frameworks in Combating Money Laundering and Terrorism Financing in Nigeria","authors":"M. Ladan","doi":"10.2139/SSRN.2336025","DOIUrl":"https://doi.org/10.2139/SSRN.2336025","url":null,"abstract":"In the recent past, more countries are becoming vulnerable to the risks of money laundering and its contagious effects. According to the International Monetary Fund (IMF), the scale of money laundering globally could be between 2% and 5% of World Gross Domestic Product at the very lowest. This translates into a range of anything between US dollars 590 billion to USD 1.5 trillion of laundered money per year.The African region and indeed most of the developing countries are vulnerable to money laundering and terrorist financing particularly because of their cash-based and open economies. In Africa, this is further aggravated by the porous and weak controls at the borders.Combating money laundering and terrorist financing in these economies is further complicated by weak or ineffective regulation of financial institutions, lack of comprehensive legal framework, weak law enforcement agencies and poor coordination and collaboration between law enforcement agencies and financial regulatory bodies.Recent studies, including the ones carried out by the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) and the Financial Action Task Force (FATF), suggest that advances in technology and the progressive tightening of Anti-Money Laundering (AML) regulations are leading money launderers to make more complex arrangements outside the formal financial services industry, such as the use of various professional services, and in particular the real estate business, legal practitioners, tax consultants, chartered accountants and designated Non-Financial Institutions or sectors, such as the International football, casinos and gaming, hotels, supermarkets, dealers in luxury goods, cars and jewelry.It is against this background that this paper seeks to realize the following objectives: 1. To examine why and how is combating money laundering and financing of terrorism a top priority for the international community;2. To appraise the development and initiatives reflected in the legal and institutional frameworks in combating money laundering and financing of terrorism in Nigeria.3. To conclude with some recommendations.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132981226","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On Thursday, March 29, 2007 the European Commission, Directorate-General for Taxation and Customs Union, will host a one-day Conference on Fiscal Fraud – Tackling VAT Fraud: Possible Ways Forward. The conference is based on the Communication of May 31, 2006 explaining the need to develop a coordinated strategy to improve the fight against fiscal fraud. This paper indicates that the EU examination of carousel fraud points the way forward for advocates of a US VAT as well. About 40% of EU VAT fraud appears to be 'missing trader intra-community' (MTIC) or carousel fraud. The best estimates of EU losses to carousel fraud are put at 23 billion euros annually. UK studies put domestic losses from carousel fraud at 2.98 to 4.47 billion euros.Fraud concerns understandably resonate deeply among American advocates of a federal level VAT in the US. It needs to be taken into consideration that inserting a national credit-invoice VAT into the US fiscal fabric would be to set out the welcome mat for an American carousel fraud, as well as the more traditional VAT frauds. The vulnerability of a US VAT to carousel fraud is a direct result of the American tendency for national, state and local tax systems to 'piggy backing' on one another is taken into account.
{"title":"American VAT – The Carousel Fraud Threat: Will the EU Show the US the 'Way Forward'","authors":"R. T. Ainsworth","doi":"10.2139/SSRN.2309426","DOIUrl":"https://doi.org/10.2139/SSRN.2309426","url":null,"abstract":"On Thursday, March 29, 2007 the European Commission, Directorate-General for Taxation and Customs Union, will host a one-day Conference on Fiscal Fraud – Tackling VAT Fraud: Possible Ways Forward. The conference is based on the Communication of May 31, 2006 explaining the need to develop a coordinated strategy to improve the fight against fiscal fraud. This paper indicates that the EU examination of carousel fraud points the way forward for advocates of a US VAT as well. About 40% of EU VAT fraud appears to be 'missing trader intra-community' (MTIC) or carousel fraud. The best estimates of EU losses to carousel fraud are put at 23 billion euros annually. UK studies put domestic losses from carousel fraud at 2.98 to 4.47 billion euros.Fraud concerns understandably resonate deeply among American advocates of a federal level VAT in the US. It needs to be taken into consideration that inserting a national credit-invoice VAT into the US fiscal fabric would be to set out the welcome mat for an American carousel fraud, as well as the more traditional VAT frauds. The vulnerability of a US VAT to carousel fraud is a direct result of the American tendency for national, state and local tax systems to 'piggy backing' on one another is taken into account.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121073270","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper makes a detailed analysis of the legal mechanisms in place in the Macau Special Administrative Region for the prevention and detection of money laundering through the gaming industry, especially in casinos. The discussion covers the basic pillars which are customer due diligence, record keeping and reporting of transactions to the government. The system in place in the gaming sector has the unique feature that it requires the systematic disclosure of all transactions above a specific amount, a rule that does not exist in the field of banking. The paper analyzes the data available on transactions reported since 2007, when the new financial intelligence unit completed its first full year in operation. The particular challenges presented by the peculiar structure of the Macau gaming market, which is heavily dependent on gaming promoters (known as 'junkets') are discussed.
{"title":"The Prevention of Money Laundering in Macau Casinos","authors":"Jorge A. F. Godinho","doi":"10.2139/ssrn.2263202","DOIUrl":"https://doi.org/10.2139/ssrn.2263202","url":null,"abstract":"This paper makes a detailed analysis of the legal mechanisms in place in the Macau Special Administrative Region for the prevention and detection of money laundering through the gaming industry, especially in casinos. The discussion covers the basic pillars which are customer due diligence, record keeping and reporting of transactions to the government. The system in place in the gaming sector has the unique feature that it requires the systematic disclosure of all transactions above a specific amount, a rule that does not exist in the field of banking. The paper analyzes the data available on transactions reported since 2007, when the new financial intelligence unit completed its first full year in operation. The particular challenges presented by the peculiar structure of the Macau gaming market, which is heavily dependent on gaming promoters (known as 'junkets') are discussed.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121851591","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article is an analysis of the related cases R v Gao and R v Hurring tried in the New Zealand District Court. These criminal proceedings arose out of an error of Westpac bank that attracted worldwide attention, namely the granting of an overdraft facility of $10 million when only $100,000 had been requested. The defendants were charged and convicted for their respective actions following that error, including drawing on the facility and spending or transferring the resulting funds. The principal charges against each were those of theft from Westpac pursuant to s 219 of the Crimes Act 1961. It is the thesis of this article that such theft charges were not available against either defendant. The article then proceeds to consider a range of alternative possible offences on the facts. It concludes that, at least in relation to Gao, charges of being an absconding debtor, or a party to defrauding creditors, might have been more appropriate, carrying lesser maximum sentences. The near fortuity that it was Gao’s company that applied for the overdraft may also have made theft from one’s own company a possibility against Gao (under s 220 of the 1961 Act), but that too would have involved very different charges from those brought.
{"title":"Getting Lost in the Borderland of Theft: R v Gao and R v Hurring","authors":"Peter G. Watts","doi":"10.2139/ssrn.2422787","DOIUrl":"https://doi.org/10.2139/ssrn.2422787","url":null,"abstract":"This article is an analysis of the related cases R v Gao and R v Hurring tried in the New Zealand District Court. These criminal proceedings arose out of an error of Westpac bank that attracted worldwide attention, namely the granting of an overdraft facility of $10 million when only $100,000 had been requested. The defendants were charged and convicted for their respective actions following that error, including drawing on the facility and spending or transferring the resulting funds. The principal charges against each were those of theft from Westpac pursuant to s 219 of the Crimes Act 1961. It is the thesis of this article that such theft charges were not available against either defendant. The article then proceeds to consider a range of alternative possible offences on the facts. It concludes that, at least in relation to Gao, charges of being an absconding debtor, or a party to defrauding creditors, might have been more appropriate, carrying lesser maximum sentences. The near fortuity that it was Gao’s company that applied for the overdraft may also have made theft from one’s own company a possibility against Gao (under s 220 of the 1961 Act), but that too would have involved very different charges from those brought.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"101 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127160880","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The increase of crime that directly or indirectly acquire proceeds, necessarily causes an increase of the methods and means which has influence to the suppression of this type of crime. In this respect, the modern penal legislation, special attention and space, devoted to the promotion of the measure, confiscation of property and proceeds acquired by criminal act, either as a penal sanction, punishment or a separate criminal legal measure.Applying this measure should establish the former legal situation, before committing the offense, it saps the power of criminal offenders for further illegal activities and the potential perpetrators are referred to a message that will be no able to retain proceeds from offense, or that the perpetration of the offense would not worth. Hence, the seizure of proceeds acquired by criminal act logically tends, as an influential tool in crime prevention aimed at acquiring property.
{"title":"Confiscation and Extended Confiscation in Macedonian Criminal Law","authors":"Tatijana Ashtalkoska","doi":"10.2139/ssrn.2199395","DOIUrl":"https://doi.org/10.2139/ssrn.2199395","url":null,"abstract":"The increase of crime that directly or indirectly acquire proceeds, necessarily causes an increase of the methods and means which has influence to the suppression of this type of crime. In this respect, the modern penal legislation, special attention and space, devoted to the promotion of the measure, confiscation of property and proceeds acquired by criminal act, either as a penal sanction, punishment or a separate criminal legal measure.Applying this measure should establish the former legal situation, before committing the offense, it saps the power of criminal offenders for further illegal activities and the potential perpetrators are referred to a message that will be no able to retain proceeds from offense, or that the perpetration of the offense would not worth. Hence, the seizure of proceeds acquired by criminal act logically tends, as an influential tool in crime prevention aimed at acquiring property.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126603198","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On June 21, 2012 the Court of Justice of the European Union (CJEU) rendered judgment on two Hungarian references, Mahageben kft v. Nemzeti Ado-es Vamhivatal Del-dunantuli Regionalis Ado Folgazgatosaga and Peter David v. Nemzeti Ado-es Vamhivatal Del-dunantuli Regionalis Ado Folgazgatosaga (Mahageben/David). The Mahageben/David decisions clarify the CJEU’s earlier holdings in the joined cases of Alex Kittel v. Belgium and Belgium v. Recolta Recycling SPRL (Kittel/Recolta). Kittel/Recolta is a critically important decision. It is central to the EU’s anti-fraud effort. It is one of three legal imperatives that earlier this year appeared to be coalescing into a Perfect (enforcement) Storm. After Mahageben/David the Perfect Storm needs to be re-assessed, because Mahageben/David limits Kittel/Recolta in some respects, while it broadly re-affirms it in others. This paper examines the relationship between Mahageben/David and Kittel/Recolta and then updates the analysis of the Perfect Storm. Kittel/Recolta stands for the proposition that a trader who enters into a transaction knowing or having the means to know that by doing so he is a participant in fraud, forfeits the right to deduct input tax incurred on purchases that were related to the fraud. Both the standards that are applied (the “known/should have known” formulation) and the scope of its application have been debated. Mahageben/David largely resolves these debates. First, in terms of the Kittel/Recolta standards the CJEU has told the legal community that it will translate the expression aurait du savoir (should have known in the official English translation of Kittel/Recolta) as ought to have known. The narrower definitions that have been argued for will not be used. Secondly, in terms of the scope of Kittel/Recolta, the CJEU has indicated that Kittel/Recolta is not limited to privity relationships, and it is applicable throughout the supply chain (but not at all in the customer chain). The consequence is that the Perfect Storm needs to be modified by removing Stage 2, and Hypo III. These no longer apply because they are dealing with fraud in the customer chain.
{"title":"Mahagében KFT & Péter Dávid: Re-Directing the EU VAT's Perfect Storm","authors":"R. T. Ainsworth","doi":"10.2139/SSRN.2097781","DOIUrl":"https://doi.org/10.2139/SSRN.2097781","url":null,"abstract":"On June 21, 2012 the Court of Justice of the European Union (CJEU) rendered judgment on two Hungarian references, Mahageben kft v. Nemzeti Ado-es Vamhivatal Del-dunantuli Regionalis Ado Folgazgatosaga and Peter David v. Nemzeti Ado-es Vamhivatal Del-dunantuli Regionalis Ado Folgazgatosaga (Mahageben/David). The Mahageben/David decisions clarify the CJEU’s earlier holdings in the joined cases of Alex Kittel v. Belgium and Belgium v. Recolta Recycling SPRL (Kittel/Recolta). Kittel/Recolta is a critically important decision. It is central to the EU’s anti-fraud effort. It is one of three legal imperatives that earlier this year appeared to be coalescing into a Perfect (enforcement) Storm. After Mahageben/David the Perfect Storm needs to be re-assessed, because Mahageben/David limits Kittel/Recolta in some respects, while it broadly re-affirms it in others. This paper examines the relationship between Mahageben/David and Kittel/Recolta and then updates the analysis of the Perfect Storm. Kittel/Recolta stands for the proposition that a trader who enters into a transaction knowing or having the means to know that by doing so he is a participant in fraud, forfeits the right to deduct input tax incurred on purchases that were related to the fraud. Both the standards that are applied (the “known/should have known” formulation) and the scope of its application have been debated. Mahageben/David largely resolves these debates. First, in terms of the Kittel/Recolta standards the CJEU has told the legal community that it will translate the expression aurait du savoir (should have known in the official English translation of Kittel/Recolta) as ought to have known. The narrower definitions that have been argued for will not be used. Secondly, in terms of the scope of Kittel/Recolta, the CJEU has indicated that Kittel/Recolta is not limited to privity relationships, and it is applicable throughout the supply chain (but not at all in the customer chain). The consequence is that the Perfect Storm needs to be modified by removing Stage 2, and Hypo III. These no longer apply because they are dealing with fraud in the customer chain.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124700614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Statistics reporting litigated cases of fraud on an exchange-by-exchange basis are not readily available to investors. This paper introduces data from three countries with multiple exchanges with different listing standards – Canada, the United Kingdom and the United States – to show litigated cases of fraud significantly vary by country, and the different exchanges within the country. Comparisons are also made to Brazil, China and Germany to assess out-of-sample inferences. The data examined suggest there are significant differences in the nature of observed fraud across exchanges within the United States; by contrast, outside the United States there appears to be a comparative lack of enforcement. The data also suggest policy implications for the ways in which fraud ought to be reported to improve investor knowledge, market transparency and market quality.
{"title":"Exchanges and Their Investors: A New Look at Reporting Issues, Fraud, and Other Problems by Exchange","authors":"Douglas J. Cumming, S. Johan","doi":"10.2139/ssrn.1985319","DOIUrl":"https://doi.org/10.2139/ssrn.1985319","url":null,"abstract":"Statistics reporting litigated cases of fraud on an exchange-by-exchange basis are not readily available to investors. This paper introduces data from three countries with multiple exchanges with different listing standards – Canada, the United Kingdom and the United States – to show litigated cases of fraud significantly vary by country, and the different exchanges within the country. Comparisons are also made to Brazil, China and Germany to assess out-of-sample inferences. The data examined suggest there are significant differences in the nature of observed fraud across exchanges within the United States; by contrast, outside the United States there appears to be a comparative lack of enforcement. The data also suggest policy implications for the ways in which fraud ought to be reported to improve investor knowledge, market transparency and market quality.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124542686","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Article sketches the goals of antitrust law, describes the causes and effects of anticompetitive pricing generally and supracompetitive pricing specifically, explains the inability of antitrust law to suppress some instances of supracompetitive pricing, establishes the importance of trust between firms as a necessary condition for supracompetitive pricing, and illustrates how the strategic exchange of information is crucial to the creation and destruction of trust and thus to the evolution and devolution of price cartels. Part II develops a positive theory that explains and predicts the evolution and devolution of price cartels as a function of the ability of rival firms to exchange information and, in turn, to enable the generation and sustenance of trust that cooperation in supracompetitive pricing decisions will be reciprocated. Part III, followed by a Conclusion, uses game theory as a heuristic to develop and test the proffered theory, posit working hypotheses, and discusses the implications for the creation, interpretation, and adjudication of antitrust law in the context of price cartels.
{"title":"The Creation and Destruction of Price Cartels: An Evolutionary Theory","authors":"W. Bradford","doi":"10.2139/ssrn.1921016","DOIUrl":"https://doi.org/10.2139/ssrn.1921016","url":null,"abstract":"This Article sketches the goals of antitrust law, describes the causes and effects of anticompetitive pricing generally and supracompetitive pricing specifically, explains the inability of antitrust law to suppress some instances of supracompetitive pricing, establishes the importance of trust between firms as a necessary condition for supracompetitive pricing, and illustrates how the strategic exchange of information is crucial to the creation and destruction of trust and thus to the evolution and devolution of price cartels. Part II develops a positive theory that explains and predicts the evolution and devolution of price cartels as a function of the ability of rival firms to exchange information and, in turn, to enable the generation and sustenance of trust that cooperation in supracompetitive pricing decisions will be reciprocated. Part III, followed by a Conclusion, uses game theory as a heuristic to develop and test the proffered theory, posit working hypotheses, and discusses the implications for the creation, interpretation, and adjudication of antitrust law in the context of price cartels.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114208591","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that are larger, older, exporting, government-owned, are widely held and/or have fewer competitors have more political influence, perceive corruption to be less of a problem and pay bribes less often; (c) influence increases sales and government subsidies and in general makes the firm have a more positive view on the government. In sum, we show that “strong” firms use their influence to bend laws and regulations, whereas “weak” firms pay bribes to mitigate the costs of government intervention.
{"title":"Lobbying and Bribes - A Survey-Based Analysis of the Demand for Influence and Corruption","authors":"Morten Bennedsen, Sven E. Feldmann, D. Lassen","doi":"10.2139/ssrn.1873891","DOIUrl":"https://doi.org/10.2139/ssrn.1873891","url":null,"abstract":"We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that are larger, older, exporting, government-owned, are widely held and/or have fewer competitors have more political influence, perceive corruption to be less of a problem and pay bribes less often; (c) influence increases sales and government subsidies and in general makes the firm have a more positive view on the government. In sum, we show that “strong” firms use their influence to bend laws and regulations, whereas “weak” firms pay bribes to mitigate the costs of government intervention.","PeriodicalId":376821,"journal":{"name":"White Collar Crime eJournal","volume":"177 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114209282","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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