Alexander, Cindy R. --- "Corporate crime, markets and enforcement: a review" [2004] ELECD 84; in Sjögren, Hans; Skogh, Göran (eds), "New Perspectives on Economic Crime" (Edward Elgar Publishing, 2004)

Book Title: New Perspectives on Economic Crime

Editor(s): Sjögren, Hans; Skogh, Göran

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843766452

Section: Chapter 3

Section Title: Corporate crime, markets and enforcement: a review

Author(s): Alexander, Cindy R.

Number of pages: 22

Extract:

3. Corporate crime, markets and
enforcement: a review
Cindy R. Alexander*

INTRODUCTION

Many issues in the design of optimal sanctions for crime are the same whether
the offender is a corporation or individual. In each instance, the canonical
problem facing the government or enforcement authority is to design and
implement an enforcement strategy that promotes optimal deterrence in the
sense of maximizing social welfare. This is typically measured as the
difference between the saving from preventing harm to the victim and the sum
of the gain to the offender foregone when crime is deterred and the cost of the
enforcement resources used in generating deterrence, as the previous chapter
explained. Valuable insights have arisen from extensive research treating
corporate offenders as little different from individuals in weighing benefits
against costs when facing the decision to commit crime. Yet refinements to the
underlying assumptions about why corporate crime occurs and the nature of
corporate sanctions can significantly enhance the practical relevance of
resulting insights.
This chapter focuses on the practical implications of a small yet growing
body of research that beneficially focuses on two features that distinguish
crimes by corporations from crimes by individuals. First, corporate crimes
tend to arise from actions of more than one person. This multi-agent property
of corporations has been the focus of an extensive theoretical literature that
views the modern corporation as a nexus of contracts, or hierarchy, and
highlights the roles of transactions costs and property rights within the
corporation in shaping corporate conduct. ...