Thomas Randolph Beard, George S. Ford, Liliana V. Stern, Michael L. Stern
Department of Economics, Auburn University, Auburn, USA.
Phoenix Center for Advanced Legal and Economic Public Policy Studies, Washington DC, USA.
DOI: 10.4236/tel.2012.25088   PDF    HTML   XML   5,168 Downloads   7,918 Views   Citations

Abstract

We show that in a dynamic general equilibrium model theft lowers social welfare even if it is costless to steal, there is no theft prevention cost, and all stolen goods are immediately returned to society. Theft lowers social welfare because it distorts the investment decision, resulting in undercapitalization and a lower steady-state level of capital. This sheds a new light on the literature originated by Tullock [1].

Keywords

General Equilibrium; Theft; Efficiency

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Conflicts of Interest

The authors declare no conflicts of interest.

References

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