Financial Incentives for Whistleblowing

Abstract

Abstract This article examines the recent trends in whistleblowing regulation, analysing the issue of financial rewards as one of the key distinctions between the legislative solutions on the matter in the United States as compared to European jurisdictions. Using the lens of corruption theories, the article concludes that the usage of financial rewards increases the overall regulatory capacity of the state to reduce corruption and fraud and reduce the emerging, largely anonymous digital whistleblowing. The financial rewards are also, due to the peculiar nature of both corruption and whistleblowing, an adequate tool to help to quantify the effects of whistleblowing. The article argues that the introduction of financial rewards should not be viewed as dependent on the differences in the legal traditions or culture but on the quality of the institutions and their ability to assess the reports of the whistleblowers. The article offers considerations concerning the conditions for the introduction of financial rewards.