The paper develops a simple model to demonstrate that, paradoxically, greater competition may exacerbate the problem of corruption. Market participants engaging in corrupt practices enjoy lower production costs-maybe because they pay a bribe to avoid installing the environmental safeguards...

The paper argues that to achieve compliance of firms with regulations such as product quality or environmental or health standards it is better to have industries with a few large corporations than numerous small firms. A model is constructed to show that limited liability constraints bind more...

The discipline of law and economics deals with wide-ranging topics, from competition and environmental policy to crime control, and has been instrumental in determining how an economy performs. Yet its success has fallen short of its potential. The discipline's shortcomings are nowhere as...