The Law and Economics of Anti-Corruption
On Monday 13 June 2022 Kasper Vagle will hold a trial lecture on a prescribed topic and defend his thesis for the PhD degree at NHH.
Prescribed topic for the trial lecture:
«The Toolbox of Law Enforcement to Fight Corruption»
Trial lecture:
12:15, AUD M, NHH
Title of the thesis:
«The Law and Economics of Anti-Corruption: The Prosecutor’s Role in Negotiated Settlements and Efficient Law Enforcement»
Summary:
The central topic of this doctoral dissertation is the role of the prosecutor in law enforcement of economic crime - that is, how the organisation of law enforcement agencies, legal procedure and the strength of institutions influence the efficiency of law enforcement. Corruption is a global problem that inflicts serious harm to people and nations. A variety of efforts are put in place to combat corruption. Still, we often lack information on the outcome of these efforts and how they should be structured and organised to reduce corruption.
Together with co-authors, Kasper Vagle explore these challenges from three different angles.
First, they investigate prosecutors’ freedom when settling a corruption case out of court. Specifically, how 66 countries organise their prosecuting authority when a corruption case is settled without a court case. The authors find that there is a considerable variation in how countries organise their prosecutors. This variation influences the discretion that the prosecutor is granted to conclude corporate bribery cases with a settlement. Vagle and co-authors find that the amount of discretion granted to the prosecutor tends to follow a bell-shaped curve when compared to indices on social and economic development. When a country develops, the prosecutor is granted increasingly more independence and discretion. This freedom is later limited by regulation.
Second, Vagle and co-authors study the difference between the expected sanction in court and the certain sanction of accepting a settlement, which we label the sanction gap. They identify aspects of law enforcement that increase or decrease the size of the sanction gap, and the consequences the size of the sanction gap has on the defendant's willingness to accept a settlement offer. The authors find that when the sanction gap is too large, even innocent defendants will accept a settlement offer rather than take the risk associated with the uncertain outcome of a court case. They argue that, per expectation, all corporate bribery cases will end in a settlement in the United States under the current legal regime. In contrast, we will see a mix of settlements and court cases in the United Kingdom.
Third, Vagle and co-authors evaluate the Romanian anti-corruption agency's efforts to tackle corruption. They identify a relationship between a corruption case and the risk of corruption in public procurement on the municipality level. The researchers analyse more than 200 000 procurement contracts for red flags in public procurement. They find a significant decrease in their objective measure of corruption risk after a corruption case. Vagle and co-authors conclude that reducing corruption risk is related to increased formal compliance with procurement procedure rules. At the same time, the opportunity to use high-risk procedures in public procurement remains prevalent.
Defense:
14:15, AUD M, NHH
Members of the evaluation committee:
Associate Professor Lars Jacob Tynes Pedersen, NHH (chair of the committee), Department of Accounting, Auditing and Law, NHH
Professor Jo Thori Lind, University of Oslo
Francesca Recanatini, Lead Economist/Public Sector Specialist, The World Bank
Supervisors:
Professor Tina Søreide (main supervisor), Department of Accounting, Auditing and Law, NHH (on leave), General Director at The Norwegian Competition Authority
Assistant Professor Mihaly Fazekas, Central European University
The trial lecture and thesis defense will be open to the public.