Document Type



Forthcoming in Jennifer Arlen, ed., Research Handbook on Corporate Crime and Financial Misdealing (Edward Elgar 2015)


Tests for “effective” compliance programs take the form of lists specifying required elements in varying level of detail. From an economic perspective, an effective compliance program can be defined more fundamentally as the set of policies and procedures that a rational, profit-maximizing firm would establish if it faced an expected sanction equal to the social costs of violations. This paper explores the idea and several of its extensions and qualifications.

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