Abstract
This research paper contributes to the literature of deterrence theory in general, and in particular, with respect to white-collar crime, offering valuable insight by using a unique dataset of fraud and violation of trust incidents within the jurisdiction of Paraguay. Descriptive evidence shows a clear and continuous misallocation of funds and human capital, therefore providing less efficient services for the public. Regression analysis suggests that clearance rate exerts a highly significant effect in deterring fraud, but the results are not clear for violation of trust incidents. Despite the limitations of available data, results confirm the deterrence theory in Paraguay. However, for more than two-thirds of victims, not even an attempt was made to seek justice. As a side-result, it seems that a soft-on-crime strategy, induced from the former German penal code, has led to an increasing share of pre-trial diversion, therefore enhancing white-collar crimes like fraud and violation of trust, due to impunity.
Highlights
The deterrence concept focuses on the use or the threat of punishment with the intention to avoid people breaking the law that governs the coexistence of a society
High shares of pre-trial diversion and archiving cases have both reached more than 30 percent on average, and are enhancing typical white-collar crime incidents as fraud and violation of trust
Notes: All figures correspond to fraud cases; Backlog is calculated since 2001; a controlled case is a case with an asigned procedural status; Turnover ratio measures the relationship between resolved cases and unresolved cases at the end of a period; Disposition time measures the theoretical time necessary for a pending case to be solved in court in the light of the current pace of work
Summary
The deterrence concept focuses on the use or the threat of punishment with the intention to avoid people breaking the law that governs the coexistence of a society These rule breakers, are almost on a daily basis being accused of fraud, violation of trust, embezzlement of public funds, and money laundering, among others, the main headlines in the newspapers. What it makes this so sensitive to society is the fact that these deviants are often politicians, prosecutors, judges, or other high-ranking public servants, who should be the first in line when it comes to maintaining law and order This behavior, directly and indirectly, reduces the quality of life of all citizens, who must cope with the lack of resources for social, health, or educational programs (Fajnzylber et al 2002; Oliver 2002). The paper contributes to the literature of deterrence theory, offering valuable insights by using exploratory regression analysis with data for fraud and violation of trust incidents within the jurisdiction of Paraguay. The results of the exploratory regression analysis for fraud and violation of trust are presented, before ending with a conclusion and recommendations
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