The Italian parliament approved this week the so called “indulto” or pardon law. According to this law, all those who have committed crimes before May 2nd 2006 will be pardoned and will not have to serve prison sentences. Although some crimes have been excluded from the law of pardon, crimes of false accounting, corruption, tax evasion and finance crimes and crimes relating to the Public Administration were not excluded.
In this post, I discuss the economics of giving pardon also to these crimes.
There are several strands of economics research that can be fruitfully used to analyze the pardon law.
One, the most obvious, is the economic model of crime, developed by Gary Becker, Nobel laureate, in 1968. Becker suggests that when considering the possibility of breaking the law, an individual will compare the expected benefits from the crime with its expected costs. The expected costs of crime depend on…
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Utopia, you are standing in it! 
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