Two countries set their enforcement noncooperatively to deter native and foreign individuals from committing a crime in their territory. Crime is mobile, ex ante (migration) and ex post (fleeing), and criminals hiding abroad after committing a crime in a country must be extradited. When extradition is not too costly, countries overinvest in enforcement: insourcing foreign criminals is more costly than paying the extradition cost. When extradition is sufficiently costly, instead, significant enforcement may induce criminals to flee the country whose law they infringed on. The fear of paying the extradition cost enables the countries to coordinate on the efficient outcome.
|Number of pages||36|
|Journal||Journal of Public Economic Theory|
|Publication status||Published - 2021|