Jobs and Punishment: Public Opinion on Leniency for White-Collar Crime

Abstract

Governments routinely offer deals to companies accused of white-collar crimes, allowing them to escape criminal charges in exchange for fines or penalties. This lets prosecutors avoid costly litigation and protects companies’ right to bid on lucrative public contracts, which can reduce the likelihood of bankruptcies or layoffs. Striking deals with white-collar criminals can be risky for governments because it could affect the perceived legitimacy of the legal system. This article explores the conditions under which the general public supports leniency agreements. Building on theoretical intuitions from the literature, we identify three characteristics that could affect mass attitudes: home bias, economic incentives, and retribution. We conduct a survey experiment in the United States and find moderate support for leniency agreements. Whether the crime occurs on US soil or abroad does not affect public opinion, and the number of jobs that would be jeopardized by criminal prosecution only has a small effect. Instead, survey respondents become much more supportive of a deal when it includes criminal charges for the corporate managers who were personally involved in the alleged wrongdoing. In the court of public opinion, punishing a handful of individuals appears to matter more than saving thousands of jobs.

The donation method: A new behavioral measure for white collar crime?

“…According to the Association of Fraud Examiners' (ACFE, 2022) most recent report, 3 fraud reports have declined by 16% over the past decade, with 58%-69% of cases not reported in 2021. Another significant limitation of official statistics is the prevalent reliance on responsive regulation and bargaining mechanisms, such as deferred prosecution agreements (DPAs), across various sectors and industries, particularly in the United States and United Kingdom (Braithwaite, 1993(Braithwaite, , 2011Bronitt, 2017;St-Georges et al, 2023). The extensive adoption of leniency agreements instead of traditional prosecutions, coupled with a decline in corporate investigations and reporting, has further skewed official white collar crime data (Garrett, 2019;St-Georges et al, 2023).…”