Essays in the Economics of Crime and Corruption

UoM administered thesis: Phd

  • Authors:
  • Vea Papadopoulou


The purpose of the thesis is to offer an examination of the economics of crime and corruption. By stressing the importance of Becker's seminal paper, we show how criminal behaviour is no longer considered the result of mental illness, but a decision largely based on a cost-benefit comparison from the possible legal and illegal actions. The puzzle that countries, with seemingly identical characteristics, display different corruption levels can be explained by considering the role of social stigma in the decision-making process. Additionally, we also examine the way that corruption is practised, by assuming that two regimes are possible, namely, collusive corruption and non-collusive corruption regimes. In the second part of the thesis, we examine the interrelationships between crime, fertility and economic growth. We link these variables of interest with the probability of avoiding apprehension, which is considered as one of the most important deterrence factors in crime decisions. In line with current literature, results show that a higher probability of avoiding apprehension increases crime rates, has a non-monotonic effect on fertility rates and an ambiguous impact on growth. The contribution of the model is that the relationship between the probability of avoiding apprehension and crime is not linear, but becomes positive after a threshold value of the parameter. In the subsequent part we provide an econometric analysis that examines these empirical regularities. We find that there exists a positive relationship between the probability of escaping apprehension, the rates of crime and fertility. The relationship is not linear but is subject to threshold effects. The finding of a positive impact of the probability of escaping arrest on both crime and fertility implies that the positive link between fertility and crime is an equilibrium outcome, rather than a causal one running from fertility to crime. In addition, we find that the probability of escaping apprehension has a negative effect on economic growth, an effect that becomes more notable when the probability exceeds a threshold value. Lastly, we consider the interrelationships among the three endogenous variables of crime, fertility and growth. In accordance with the theoretical section, we find that the probability of avoiding detection has a positive effect on both crime and fertility. In addition, these two variables negatively affect economic growth.


Original languageEnglish
Awarding Institution
Award date31 Dec 2012