Controlling Corruption in Law Enforcement: Incentives, Safeguards, and Institutional Change in the Ottoman Empire

Until the seventeenth century, the Ottomans used fines extensively for law enforcement and employed agents to collect the fines. Fines can be costly to implement because of agency problems and corruption. To solve the problem of corruption, the Ottomans implemented a variety of mechanisms, including periodic rotation of officials, separation of adjudication from punishment, and compensation for law enforcers through a two-part scheme consisting of fines and taxes. The system underwent a significant transformation after the seventeenth century, following a period of high inflation that raised the agency cost of a fixed fine system. Imperial decentralization in the provinces and the institution of long-term taxfarming also altered the government’s relationship with local law enforcement agents and reduced the effectiveness of control mechanisms. Consequently, the Ottomans relied less on fines for punishment. Using insights from the law and economics literature, we examine how the earlier mechanisms helped to combat corruption in law enforcement and why they were less effective in later periods.