Crime and Punishment and Corruption: Who Needs “Untouchables?”

Abstract Becker's result that fines should be maximized is also applicable to some social environments where law enforcers are corrupt. If the regulated activity is legal, the principal may efficiently deter crime without an anti‐corruption unit. An opportunistic anti‐corruption unit, even when corrupt, becomes useful for the principal when the activity is illegal, since the principal's goal of maximizing fines motivates the unit to collect bribes from the enforcer, which subsequently induces the enforcer to be nearly completely honest, minimizing corruption. Therefore, we show that there is not necessarily an infinite regress originating with the puzzle of who polices the police.