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Препринт

Модель коррупции и наказания на нелегальном рынке

The present paper examines the relationship between illegal activity and corruption as a means to overcome legal prohibition of the former. This relationship is modeled by endogenous determination of probability of punishment for illegal activity, which is assumed to depend both on the actions of illegal market participants and on the functioning of law enforcement system (to be specifi c, on the amount of resources available to it in order to counteract illegal activities). Model analysis allows for effi ciency evaluation of various measures to combat illegal activity and shows, in particular, that with corrupt law enforcers increased punishment for illegal activity, though being able to restrict its scope, could at the same time aggravate the issue of corruption.