DETERRENCE OF THEFT IN A SITUATION OF COMPETITION BETWEEN FORMAL AND INFORMAL INSTITUTIONS
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Date
2020-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
L'Actualité économique
Abstract
The aim of this article is to highlight important factors neglected in modelling
the effects of deterrent policies on thieves' activities in the real world. The methodology
adopted consists of defining a world with three continuous spaces. Space in the centre
has no institutions and no production. Only the other two spaces have institutions and are
places for production. The study uses the Tullock contest fonction for n-players developed
by Jia (2012) to identify thieves' efforts and the institutions' endowments at equilibrium.
In contrast to the existing literature, our results indicate a perverse, indirect effect of institutions'
deterrence strategies on thieves' activities and a negative effect of an increase in institutional
deterrence on the total proportion of production stolen. This outcome therefore supports deterrence policies.
Symmetric equilibrium becomes unstable when institutions have different production levels.
However, we note that asymmetric equilibrium remains optimal, even in situations of differences
in production across institutions. A confrontation between thieves from different areas can be a
way for an institution to provide less deterrence in an asymmetric balance while guaranteeing a
higher level of consumption than that under the opposing institution.
Description
L'Actualité économique Vol 96, numéro 2, juin 2020, p. 245–292
Keywords
CEFORGRIS, Joseph Ki-Zerbo University and Ouaga II University, Burkina Faso
Citation
Yerbanga, A. (2020). Deterrence of Theft in a Situation of Competition between Formal and Informal Institutions. L'Actualité économique, 96(2), 245-292.