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Recent years have seen a rapid increase in legislation governing, protecting, and rewarding whistleblowers. Whereas the EU recently enacted a Directive protecting whistleblowers, the US has gone one step further long ago, not only protecting them but also offering substantial monetary rewards for their information. In this paper. we review the evidence for the effectiveness of US whistleblower reward programs and consider some recent novelties. We also consider objections against these programs and local factors in the US that likely contribute to their success. Finally, we voice some concerns over the EU Directive's ability to achieve its policy objective of enhancing enforcement of Union law.

In the last two decades prolonged instances of corporate wrongdoing in Europe have been un-covered: from Siemens' systemic bribery to HSBC and other major bank's money laundering issues, Dieselgate, LIBOR price-rigging, and the recent Wirecard debacle. What has driven European firms to engage in such systematic wrongdoing? In this article, we first use data on US investigations to identify the European countries hosting most corporate wrongdoers. We then consider these countries' legal, institutional, and political contexts in search for explanations of the main enablers of this behavior, ending with some policy recommendations.

AbstractWhistleblower rewards have been used extensively in the United States to limit procurement fraud and tax evasion, and since the financial crisis their use has been extended to fight financial fraud. There is currently debate over their introduction in Europe, but authorities there appear considerably less enthusiastic than their American counterparts. While it is important that these tools are scrutinized in a lively democratic debate, much has been written – even by important institutional players – that has no empirical backing or openly contrasts the available evidence from independent research. In this paper we review some of the most debated issues regarding the potential benefits and costs of financial incentives for whistleblowers, while trying to separate existing evidence from conjectures with no empirical support, and myths in contrast to available evidence.

Whistleblower rewards have been used extensively in the US to limit procurement fraud and tax evasion, and their use has been extended to fight financial fraud after the recent financial crisis. In Europe there is currently a debate on their possible introduction, but authorities appear considerably less enthusiastic than their US counterparts. While it is important that these tools are scrutinized by a lively democratic debate, many things have been written, even by important institutional players, that have no empirical backing or that are in open contrast with the available evidence from independent research. In this paper we review some of the most debated issues regarding the potential benefits and costs of financial incentives whistleblowers trying to separate existing empirical evidence from conjectures with no empirical support, and myths in obvious contrast with available evidence.

Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against price-fixing conspiracies around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of public officials. In the absence of coordinated forms of leniency (or rewards) for unveiling corruption, a policy offering immunity from antitrust sanctions may not be sufficient to encourage wrongdoers to blow the whistle, as the leniency recipient will then be exposed to the risk of conviction for corruption. This paper assesses the extent of this problem by describing and discussing the antitrust and anti-corruption provisions present in a few selected countries, from both common law and civil law regimes. For each of these countries, we try to evaluate whether the legal system presents any solution to limiting the risk that legal provisions against corruption undermine the effectiveness of leniency programs against bid rigging in public procurement. Legal harmonization, coordination and co-operation on procedural and substantive issues, and inter and intra jurisdictions, seem essential to solve this problem. Given the size of public procurement markets and their propensity for cartelization, specific improvements in legislation appear necessary in all the countries considered. Explicitly introducing leniency policies for corruption, as has been recently done in Brazil and Mexico, is only a first step. The antitrust experience has taught us these policies must be carefully designed and sufficiently generous, they should not be discretional, and they must be consistently implemented to achieve their goals of inducing whistleblowing. Hence, the road ahead appears a long one. To increase the effectiveness of leniency in multiple offense cases, we suggest, besides extending automatic leniency to individual criminal sanctions, the creation of a 'one-stop-point' enabling firms and individuals to report different crimes simultaneously and receive leniency for all of them at once if they are entitled to it. As long as individual criminal charges are not covered by a coordinated and non-discretional leniency program, there is little hope that these provision will induce any improvement in the fight against corrupting cartels. A more effective way to fight such cartels may then be offering Qui Tam rewards to non-accomplice whistleblowers, as is already done with apparent success by several law enforcement agencies in the US.