Monday, August 25, 2008

How to Really Stop White Collar Crime

I recently attended a session at the Academy of Management conference in which one of the papers presented concerned unethical behavior by corporations. The author argued that this type of behavior could not be explained by simple cost-benefit analysis. I thought, "Why not?" The benefits to a lot of these activities are pretty high and the probability of being caught seems fairly low. And, even if the individuals are caught and their extremely well-paid and talented legal team are unable to successfully defend them, what type of sentence awaits them? Probably a few years at a minimum security prison.

Things might be a little different if the penalties were stiffer, like this. According to the article, the former finance director of China Southern Airlines was accused of embezzling over $100 million dollars and was recently convicted. His sentence:
Chen, 59, was sentenced to death with a two-year reprieve by Guangzhou Intermediate People's Court.

1 comment:

  1. What's the marginal punishment of going from embezzlement to murder? Zero. Would you consequently expect to see more embezzlers commit murder or fewer? My guess is more.

    Hence, this is probably not a good punishment. Thirty years in PMITA prison, however, might be.