Non-trial resolutions for corruption crimes and the Brazilian case

Non-Trial Resolutions (NTRs) are enforcement mechanisms that allow offenders to avoid trial by cooperating with authorities in exchange for reduced sanctions. These instruments have become central to modern anti-corruption enforcement and are explicitly endorsed by international frameworks such as the United Nations Convention against Corruption and the OECD Anti-Bribery Convention. This thesis studies the effectiveness of NTRs—particularly Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs)—as deterrence tools against collusive public corruption. Collusive corruption involves mutually beneficial agreements between public officials and private actors and is economically distinct from extortive or coercive bribery. By aligning incentives on both sides of the transaction, collusion increases expected payoffs, reduces reporting incentives, and generates persistent distortions that weaken public institutions and the rule of law. The thesis examines whether sanction reduction policies embedded in NTRs improve enforcement efficiency by inducing cooperation, or whether excessive leniency undermines deterrence by lowering expected penalties. The analysis combines theoretical modeling and empirical evaluation. The theoretical component develops a corruption game in which rational agents choose whether to engage in bribery, self-report, or cooperate after detection. The model shows that sanction reductions can increase deterrence by strengthening enforcement credibility and facilitating information revelation. However, when reductions are too generous, expected sanctions fall below deterrence thresholds, potentially increasing equilibrium corruption. The analysis further shows that voluntary self-reporting before detection is generally dominated unless agents anticipate a sufficiently large increase in detection or conviction probabilities. The empirical component examines Brazil’s 2013 anti-corruption reforms, which introduced NTR-like mechanisms, using a semi-structural approach. The results provide evidence consistent with a deterrent effect on corruption-related offenses. Finally, the thesis evaluates the application of these policies in Operation Car Wash, highlighting that although the enforcement outcomes appear successful, NTR-based strategies remain controversial due to political economy constraints and institutional frictions affecting their long-run sustainability.