Indian economist Kaushik Basu argued that in order to deter corruption, legal immunity should be given to bribe-giver (but not bribe-taker). That is, when an act of bribery is committed and both of the doers are caught, the bribe giver should be set free and allowed to collect their money, but the bribe taker should be punished.

This is indeed an interesting method for deterring corruption by managing its supply-side. It provides incentives for suppliers (bribe-giver) to report and turn over the bribe-taker to the police. He provides caveats however, that bribe giver may have an interest to manage his or her reputation in the underworld (I can imagine that someone like Ayin will have to be ‘credible’ enough in order to earn trust from the bureaucrat – that is to say, to have some sort of an underworld moral code). He also warn the possibilities that false charges of bribery on behalf of the public officials may rise, but this can be managed by increasing penalties for false charges – somewhat dilemmatic for a lawyer.

Anyway, download the paper here.

H.T. Marginal Revolution