Siena Seminar
04/2005
Crime and Law
Enforcement
Nuno Garoupa
Universidade Nova de Lisboa
CEPR, London
OUTLINE
Overview of the Economics of Law Enforcement
1.
Introduction
1.
•
The Economics of Deterrence and Law Enforcement
•
•
•
•
•
Basic Economic Model.
Extensions of Basic Model.
Other Goals of Law Enforcement.
Empirical Work: The Controversies.
The General Structure of Law Enforcement
•
•
•
Background: The Classical School; The NeoClassical School.
The Choice of Private vs. Public Enforcement of the Law.
Determinants of the Structure of Law Enforcement: Criminal, Tort, and
Administrative.
Economic Aspects of Criminal Procedure.
INTRODUCTION
Background
The Early Days
• Cesare Beccaria (1738-1794)
[Cesare Bonesana, Marchese di Beccaria]
Of Crimes and Punishment, 1764
• Jeremy Bentham (1748-1832)
Introduction to the Principles of Morals and
Legislation, 1789
Beccaria
•
Fundamental Ideas
– There should be as little law as possible
– Criminal law should not simply uphold moral values for their own sake, but
should furnish the requirements of society
– Criminal offenses should be clearly defined
– Punishment should be proportional to the harm done to society; it should
not exceed that which was necessary to ensure that the criminal would not
re-offend;
– Punishment should deter in a general sense;
– There must be certainty of punishment and it should be imposed promptly
– Certain moderate punishment is easier to enforce and therefore is more
effective than the mere possibility of a severe one;
– Fines should dominate over imprisonment and death penalty (which he
disliked);
– Corporal punishment is the appropriate way to deal with violent offenders.
Impact of Beccaria’s work
• Abolishment of death penalty in Tuscany and,
for a while, in Austria.
• Declaration of Rights of Man in France.
• Revolutionary Code of 1791: the level of
punishment was related to the precise nature
of the offense to such an extent that the only
function for the judge was the determination
of guilt or innocence.
• American Declaration of Independence.
Impact in America
“We perceive... that the severity of our criminal law
(that is, the old criminal law inherited from England) is
an exotic plan, and not the native growth of
Pennsylvania... as soon as the principles of Beccaria
were disseminated, they found a soil that was
prepared to received them.”
William Bradford, 1793, US Attorney-General
Bentham
• Fundamental Ideas
– Criminal law should be subject to the principle of “the
greatest happiness of the greatest number” (utilitarism);
– Every human act should be first evaluated in terms of
whether it will cause pleasure or pain;
– To deter a crime, the amount of pain derived from the
forbidden act should be greater than the amount of pleasure;
– Harsh punishment should be constrained by the social
contract, no-one could be taken to have agreed to the
possibility of receiving excessively harsh punishment;
Impact of Bentham
• Reports for a Criminal Code (18331848) in the UK;
• Code Napoleon of 1810.
Neoclassical School
• Rossi (1787-1848); Garraud (18491930); Joly (1839-1925).
• Fundamental Ideas:
– There are limitations to rational choice;
– Punishment should fit the crime rather than
the criminal;
– People are free not to choose crime.
And Rational Choice Goes
Away...
• Positivism... The predestined model;
[from 1880s to 1960s]
• Labelling Theories ... The victimized
model;
[from the 1960s on to today]
... And Rational Theory makes a
comeback
• The Modern Rational Theory
–
–
–
–
–
James Q. Wilson, Thinking About Crime (1975)
Clarke and Cornish, introduce limited rationality (1987)
Cohen and Felson, Routine Activities Theory (1979)
Hirschi, Social control theory (1969)
Gottfredson and Hirschi, General theory of crime (1990)
• The Economic Theory
–
–
–
–
Becker (1968, JPE)
Stigler (1970, JPE)
Ehrlich (1973, AER)
Work by Polinsky and Shavell: OPTIMAL LAW ENFORCEMENT
ECONOMICS OF
ENFORCEMENT
BASIC MODEL
•
•
•
•
Objective of law enforcement: DETERRENCE.
Why?: Externality (social harm or social damage).
How?: Internalize externality.
Market Approach to Law Enforcement:
– Is there a market for offenses?
– Is a sanction really a price?
• Price approach (Becker, 1968 JPE)
• Pigou taxation approach (Cooter, 1982 Columbia LR)
• Policy instruments:
– Sanction: Fine;
– Resources devoted to punishment: Probability;
BASIC MODEL
• Individuals compare:
– Benefits
• Illegal Gain
• Other Gains (Psychological, Biological,…)
– Costs
• Expected Punishment
• Social Costs: Stigma
• Other Costs (Psychological)
• Decision to offend is the rational outcome of
comparing costs and benefits
There will be crime if Benefits > Costs
NORMATIVE FRAMEWORK
• What are the payoffs?
– Criminal : Benefits of crime – Costs of
crime
– Victim: Harm from crime
– Government: Benefits from punishment–
Enforcement Costs
NORMATIVE FRAMEWORK
• Utilitarian Social Welfare:
Benefits of Crime [C] + Benefits from
Punishment [G] – Costs of Crime [C]–
Harm from Crime [V] – Enforcement
Costs [G]
NORMATIVE FRAMEWORK
• Should Illegal Gains be Considered?
– Social Contract
– Kaldor-Hicks Efficiency
– Pareto Conflict Theorem (Kaplow and
Shavell, 2000 JPE)
DETERRENCE WITH FINES
• Compliance is achieved if Benefit from
Crime = Cost of Crime
• Benefit = Illegal Gain
• Cost of Crime = Probability x Fine
DETERRENCE WITH FINES
• Compliance is Efficient if...
Illegal Gain < Harm
• Compliance is NOT Efficient if...
Illegal Gain > Harm
• Therefore, we should have...
Probability x Fine = Harm
THE MULTIPLIER
PRINCIPLE
Fine=Harm/Probability
Harm = 100
PROB
1
0,5
0,1
0,01
0,001
0,0005
FINE
100
200
1000
10000
100000
200000
EX. FINE
100
100
100
100
100
100
LIMITATIONS OF MULTIPLIER
PRINCIPLE
• Resistance to Inflating Sanctions
– Punishment should fit the crime
• Difficulty in estimating accurately the
probability of punishment
• Individuals are not risk neutral
• Does not say which policy is efficient
BECKER’S FUNDAMENTAL
RESULT
Fines are costless transfers
Resources devoted to punishment are
socially costly
High Fine – Low Probability
Fine= Entire Wealth
Probability should go to Zero
BASIC PROPERTIES OF LAW
ENFORCEMENT
• Acts that have a benefit higher than the
external cost they cause SHOULD NOT
be deterred and SHOULD be punished.
• Acts that have a benefit lower than the
external cost they cause SHOULD be
deterred.
BASIC PROPERTIES OF LAW
ENFORCEMENT
• Punishment should be based on harm to the
victim and not on the gain to the criminal
(Polinsky and Shavell, 1993 JLEO).
• A sanction based on the gain to the criminal
would deter by removing the illegal gain.
However, if the gain is above the level of
harm, the deterrence of these acts would be
inefficient.
OPTIMAL LAW ENFORCEMENT
• The Multiplier Principle is not Efficient because it
does not care about enforcement costs.
• Efficient probability and sanction should maximize
social welfare
• Fine equals entire wealth (Becker)
• Probability “equals”
Harm/Fine – Marginal Cost of Enforcement
– Expected Fine is less than Harm
– Some under-deterrence is efficient (Polinsky and Shavell)
– Complete deterrence is not efficient (Polinsky and Shavell)
OPTIMAL LAW ENFORCEMENT
• Efficient Deterrence is NOT…
… Complete Deterrence.
… achieved by the Multiplier Principle.
• Efficient Deterrence is…
… maximization of Social Welfare.
… about criminals being able to compensate
victims (potential).
DETERRENCE WITH
NONMONETARY SANCTIONS
• Nonmonetary sanctions are different because:
– They are socially costly to impose (NOT costless)
– They create disutility (NOT transfer)
DETERRENCE WITH
NONMONETARY SANCTIONS
• Optimal Nonmonetary Sanctions (Polinsky
and Shavell, 1984 JPubE):
• Should NOT be maximal…
• Should be used infrequently…
• Should be implemented once fines are exhausted…
» Less wealthy people
• Should only be applied for more harmful acts…
DETERRENCE WITH
NONMONETARY SANCTIONS
• Why NOT?
• Wealth is private information: imprisonment as a
device for information revelation (Levitt, 1996 IRLE)
• Disutility of imprisonment (Polinsky and Shavell,
1998 JLS)
– Risk neutrality with respect to fines
– Risk-aversion with respect to imprisonment
• Corruption or other means of punishment avoidance
(Garoupa and Klerman, 2004 IRLE)
LAW ENFORCEMENT
LITERATURE
NONMAXIMAL FINES
MARGINAL DETERRENCE
ENFORCEMENT ERRORS
REDUCTION IN ENFORCEMENT COSTS
ENFORCEMENT BY VICTIMS
INCENTIVES FOR ENFORCEMENT AGENTS
CORPORATE AND BUSINESS CRIME
LAW ENFORCEMENT
LITERATURE
(since 1979)
1.
Marginal Deterrence
1.
2.
3.
2.
Multiple Offenses
Attempts
Repeat Offenders
Deterrence with a Reduction in
Enforcement Costs
1.
2.
3.
4.
5.
3.
Plea-Bargaining
Self-Reporting
Corruption
Avoidance activities including
defense expenditure
Legal Aid
Corporate & Business Crime
1.
4.
Principal Agent Theory
1.
2.
Should the Management or the
Shareholders be Punished?
Deterrence vs. “Cover Up”
Victims
1.
Precaution
1.
2.
3.
5.
Compensation
Hate Crimes
Enforcement Errors
1.
2.
Deterrence
Miscarriage of justice
1.
6.
Should we have comparative
negligence rules in criminal law?
Systematic or Random?
Incentives for Enforcement Agents
1.
2.
3.
Monitoring versus Investigation
What do Prosecutors maximize?
What do Judges maximize?
MARGINAL DETERRENCE
• If sanctions are maximal for all acts, the
marginal expected cost for a second crime is
zero... It will not be deterred!
• Suppose there are two possible criminal acts:
– Objective 1: Deter act A and act B.
– Objective 2: If act A has been committed, deter act
B.
– Objective 3: If act B has been committed, deter act
A.
MARGINAL DETERRENCE
• If we apply maximal fines objectives 2
and 3 cannot be achieved!!
• Therefore, in order to satisfy objective 2
and 3, we need nonmaximal fines.
• Objective 1 is deterrence in the general
sense whereas objectives 2 and 3 are
marginal deterrence.
MARGINAL DETERRENCE
• Implications (Stigler and others):
– ... More harmful acts have higher fines, but less
harmful act should have lower fines...
– ... The fine for act A should increase with the level
of harm generated by act A and decrease with the
level of harm generated by act B...
– ... There is a tension between marginal deterrence
objectives and general deterrence objectives...
OTHER GOALS OF
ENFORCEMENT
•
•
•
•
Incapacitation
Rehabilitation
Retribution
Preference Shaping
– Stigma
– Social Norms
OTHER GOALS OF
ENFORCEMENT
• Incapacitation
– Benefit of incapacitation is the harm s/he would
commit otherwise;
– Imprisonment is more effective than fines;
– However, in some particular contexts, other
sanctions can be equally effective…
• … losing driver license, suspending professional
rights,…
– Probability of detection and punishment is
irrelevant.
OTHER GOALS OF
ENFORCEMENT
• Incapacitation
– Deterrence is about dissuading an individual
from committing a criminal act;
– Incapacitation is about preventing an individual
from engaging in a criminal act and remove
parties from positions in which they could
cause harm;
– What an individual knows is irrelevant for
incapacitation.
OTHER GOALS OF
ENFORCEMENT
• Incapacitation
– The marginal benefit from incapacitation
should equal the marginal cost;
– Only those people who are highly prone to
harm society should be incapacitated.
– Empirical question: can we distinguish
incapacitation from deterrence?
• See Kessler and Levitt on using sentencing
enhancements to distinguish INC and DET.
OTHER GOALS OF
ENFORCEMENT
• Rehabilitation
– Marginal benefit from changing criminogenic
preferences should equal the marginal cost of
rehabilitation programs.
– Empirical literature is not exciting about
rehabilitation…
• Retribution
– Sanctions will be higher than otherwise…
OTHER GOALS OF
ENFORCEMENT
• Preference Shaping
– Stigma
• Deterrence. (Rasmusen, 1996 JLE)
• Intertemporal inconsistency: entry vs. exit barriers. (Funk, EER 2005)
– Social Norms
•
•
•
•
Norms management
Relationship between extralegal and legal norms
Criminal law as a signal
Criminal sanctions as part of optimal morality rules
– Expressive Law and Economics
• Criminal Law as a focal point
EMPIRICAL ANALYSIS
EMPIRICAL ANALYSIS
•
The decline of crime in the 1990s in the US
–
–
–
–
–
•
The magnitude
The broad range
The universality
The persistent, continuous nature of the crime decline
Unexpected drop
The controversies
–
–
–
Death penalty
Guns
Legal abortion
–
–
–
–
–
Effects of sentencing guidelines on crime rates
Affirmative action on policing
Racial bias on arrests
Low female criminality
Effects of juvenile sentencing rules on juvenile delinquency
(Levitt, 2004)
(Levitt, 2004)
US
1995-1999
EUROPEAN UNION
1995-1999
HOMICIDE RATES
-28%
-4%
VIOLENT CRIME
-20%
+11%
BURGLARY
-19%
-14%
MOTOR VEHICLE
-22%
+7%
(Levitt, 2004)
CAPITAL PUNISHMENT
• DEBATE
• Ehrlich (1973, 1975): seven murders per execution.
• A number of critics demonstrated the sensitivity of Ehrlich’s findings to
minor changes in specification.
• Similar debate in Britain (Wolpin, Pyle, Cameroon).
• Leamer and McManus in the late 1980s argue that the evidence of
deterrence is essentially a product of the researcher’s prior beliefs.
• Ehrlich and Liu (1999): focus on 1940 and 1950, there is a deterrent
effect.
• A series of more recent studies that incorporate data from the 1990s
find yet again a deterrent effect. But others do not. Measurement
problems and econometric specification are at the heart of the debate.
• Levitt (2004): believes if there is any effect, it is small.
CAPITAL PUNISHMENT
• Levitt’s argument against a substancial deterrent
effect of capital punishment:
– Rarity of executions and long delays in doing so...the
probability is still below 1 in 200 (2% annual execution rate
for those on death row, just twice the death rate from
accidents and violence among all American men).
– Even if Ehrlich’s optimistic empirical estimate would only
eliminate 364 homicides per year, less than 1/20 of the
observed decline.
• Notice: the question of deterrence is effectiveness
and not efficiency of dealth penalty.
CONCEALED WEAPONS LAWS
• Concealed Weapons (Shall Issue) Laws
– Argument: in face-to-face contact and for particular crimes, armed
victims raise cost faced by a potential offender.
• Under Shall Issue Laws:
– A law that allows a citizen to carry a concealed handgun if h/she
can demonstrate a need to a governmental official is a discretionary
or “may issue” law;
– A “shall issue” law is designated to eliminate discretion on the part
of officials because permits have to be issued unless specific and
easily verifiable factors say otherwise.
– Permit cannot be issued for:
• Individuals below 18 or 21;
• Those who have a criminal record or a history of mental illness.
CONCEALED WEAPONS LAWS
• DEBATE over the enactment of Shall Issue
Laws with respect to Gun Concealed on
Crime Rates
– Lott and Mustard (1996, JLS) , Lott (1997, JLS;
2000) NEGATIVE
– Black and Naggin (1998, JLS), Duggan (2001,
JLS), Ayres and Donohue (2001, ALER; 2003,
Stanford LR)  NO, SOME POSITIVE
ABORTION AND CRIME
•
The Legalization of Abortion (Roe v. Wade)
– Theory
• Unwanted children are at greater risk for crime;
• Legalized abortion leads to a reduction in the number of unwanted births.
– Evidence by Donohue and Levitt (2001, QJE)
• The five states (NY,W, Alaska, Hawaii and California after SC of California ruling
of 1969) that allowed abortion in 1970 experience declines in crime earlier than
the rest of US.
• States with high and low abortion rates in the 1970s experienced similar crime
trends for decades until the first cohort exposed to legalized abortion reached the
high-crime ages around 1990. At that point, the high abortion states saw dramatic
declines in crime relative to low abortion states over the next decade.
• Panel data estimates confirm the strong relationship between lagged abortion and
crime.
ABORTION AND CRIME
•
Debate:
– Lott and Whitley (2003) criticize:
• Abortion may prevent the birth of "unwanted" children, who would have relatively
small investments in human capital and a higher probability of crime.
• On the other hand, some research suggests that legalizing abortion increases outof-wedlock births and single parent families, which implies the opposite impact on
investments in human capital and thus crime.
• The question is: what is the net impact?
• They find evidence that legalizing abortion increased murder rates by around
about 0.5 to 7 percent.
• Previous estimates are shown to suffer from not directly linking the cohorts who
are committing crime with whether they had been born before or after abortion
was legal.
• Though abortion was indeed legalized in New York, California, Alaska, Hawaii,
and Washington prior to the 1973 Roe vs. Wade decision, there were also a
sizeable number of abortions being performed in other states where abortion was
legal for the life or "health" of the mother before 1973. Indeed, several of these
states had abortion rates as high or higher than those states where abortion was
legalized.
– Joyce (2003):
• Demographers have concluded that most legal abortions in the early 1970's
replaced illegal abortions. Since no one has data on illegal abortion rates, the
results in Donohue and Levitt (2001) may be spurious.
STRUCTURE OF LAW
ENFORCEMENT
PRIVATE vs. PUBLIC
ENFORCEMENT
1.
Theory
1.
2.
3.
4.
Becker and Stigler, 1974 JLS
Landes and Posner, 1975 JLS
David Friedman, 1984 JLS
Enforcement Problems:
1.
2.
3.
2.
Under-enforcement; Polinsky, 1980 JLS
Error; Garoupa, 1997 IRLE
Rent-seeking; Garoupa and Klerman, 2002 ALER
Historical Cases
1.
Roman Law
[Posner 1981, Parisi 2002 ALER, Garoupa and Gomez 2004]
2.
England vs. France
[Friedman 1996 UChicago R., Glaeser and Shleifer 2002 QJE]
2.
Medieval (pre-Norwegian) Iceland
[Friedman 1979 JLS]
THEORY
•
Becker and Stigler, 1974 JLS
•
•
A system where the enforcer receives the fine
paid by the offender eliminates corruption;
We need private enforcement to get efficient
deterrence.
THEORY
•
Landes and Posner, 1975 JLS
•
•
A fine is the price for criminal market and
price for the enforcement activities – it cannot
be set at a level which will optimize both
criminal and enforcement activities.
Private enforcers will not internalize the
positive externality from raising the
probability, hence crime rates will be higher.
THEORY
•
David Friedman, 1984 JLS
•
•
•
Government enforcement is also subject to
inefficiencies, therefore the question is which
system is superior  Empirical answer…
Enforcement contracts are prior to detection,
and therefore the deterrent effect of catching
criminals can be internalized by “advance
contracting” as in any other market.
Allocation of the right to catch criminals:
private property of the victim who should be
able to sell it to the highest bidder.
THEORY
•
Private Enforcement Problems:
1. Under-enforcement; Polinsky, 1980 JLS
1. Monopoly
• Competitive Market
2. Error; Garoupa, 1997 IRLE
• More errors than efficient;
• “Sanction” enforcer when accused is found not guilty
 pay for performance
• Make sure performance measure cannot be
manipulated: evidence,…
3. Rent-seeking; Garoupa and Klerman, 2002 ALER
• Enforcers and Government Bureaucrats compete for
rents.
STRUCTURE OF LAW
ENFORCEMENT
1.
Determinants of the Structure of Law Enforcement.
2.
Why Criminal Law?
1.
2.
Criminal and Tort.
Criminal, Tort and Administrative.
GENERAL STRUCTURE OF
LAW ENFORCEMENT
(from Shavell, 2004)
METHOD
CRIMINAL LAW
TORT LAW
CONTRACT LAW
SAFETY
REGULATION
INJUNCTION
CORRECTIVE
TAXATION
STAGE OF
INTERVENTION
PREVENTION,
ACT-BASED,
HARM-BASED
HARM-BASED
HARM-BASED
FORM OF
SANCTION
MONETARY,
NONMONETARY,
OTHER
MONETARY
MONETARY,
OTHER
PREVENTION
MONETARY,
AND ACT-BASED OTHER
PREVENTION
OTHER
ACT-BASED
MONETARY
PRIVATE
VERSUS PUBLIC
PUBLIC
PRIVATE
PRIVATE
PUBLIC
PRIVATE
PUBLIC
DETERMINANTS OF STRUCTURE
OF THE LAW
(from Shavell, 2004)
• Determinants of Optimal Stage of
Intervention
– Magnitude of Possible Sanctions for
Deterrence
– Prevention
– Information about Acts:
» When is available
» To Whom is available … State… Parties
– Enforcement Costs
DETERMINANTS OF STRUCTURE
OF THE LAW
(from Shavell, 2004)
• Determinants of Optimal Form of Sanctions
– Level of Wealth
– Illegal Gain
– Harm
– Resources Devoted to Detection and
Punishment
» Enforcement Costs
» Distribution of Costs
DETERMINANTS OF STRUCTURE
OF THE LAW
(from Shavell, 2004)
• Determinants of Public vs. Private
Enforcement
– Information is primarily private
» Reporting
» Compensation, Retribution
– Effort must be Expended to Identify Injurers
» Information systems may constitute natural
monopolies
CRIMINAL VS. TORT
• Posner’s Typology of Crime (1985, CLR):
– Criminal Law deters pure coercive transfers of
wealth, pure implying it is not an accident of
productive activities.
– Crimes are acts that aim at “market bypassing”
• Acquisitive crimes bypass explicit markets
• Crimes of passion bypass implicit markets
– Allowing coercion would create incentives for
potential victims to spend heavily on selfprotection.
CRIMINAL VS. TORT
• Problems:
– What is the difference between intentional torts
and crime in a “market bypass approach”?
– Why are some conducts crimes at common
law (counterfeiting) and others made criminal
by statute (tax evasion or price-fixing)?
– Some crimes are voluntary exchanges,
prostitution, gambling…
• Effect on third parties.
CRIMINAL VS. TORT
• Criminal law is designed primarily for when
tort law does not work…
– For the poor…
– The affluent are kept in line by tort law…
• Same conclusion as Critical Criminology
but…
– They think it is wrong!
– Posner (CLR, 1985) explicitly thinks it is ok!!
CRIMINAL VS. TORT VS.
ADMINISTRATIVE
• Economic Explanations for Crime, Tort and Administrative
overlap:
(Rubinfeld and Sappington, 1987 RAND; Garoupa and Gomez, 2004 ALER; Pistor and Xu, 2002)
– Regulatory Enforcement is cheaper but less effective;
– Forces production of information by victims and
enforcers;
– Generates “competitive enforcement”
» Duplication of Costs
» Deters Corruption
» Avoids Error
– Incompleteness of the law
ECONOMICS OF CRIMINAL
LAW
CRIMINAL LAW
(Posner, CLR 1985)
• Criminal Intent
– Distinguish intent from awareness.
– Unless the criminal defendant confesses, his state
of mind has to be inferred from actions…
– Deterrence theory requires premeditation…
• Behavioral Approach to Crime (Jolls, Sunstein and Thaler, 1998
Stanfort LR, but see criticism by Arlen, 1998 Vanderbilt LR and
Garoupa, 2003 EJLE)
CRIMINAL LAW
(Posner, CLR 1985)
• Defense of Insanity
– Cannot be deterred…
– But what about incapacitation?
CRIMINAL LAW
(Posner, CLR 1985)
• Defense of Necessity
– No question of incapacitation,
– Lowers transaction costs…
– Widespread use could bypass market
transactions.
– Example: Dudley and Stephens (1884).
• One of them was near dead in any case, and
that killing and eating save the other three men.
CRIMINAL PROCEDURE AS A
MARKET SYSTEM
(Easterbrook, JLS 1983)
• Ideal Criminal Procedure Market
System:
– Optimal pricing: internalize social harm;
– Efficient trade-off between fines and
severity;
– Optimal allocation of resources given
constrained budgets:
• Price set by negotiations;
• Feedback effect
CRIMINAL PROCEDURE AS A
MARKET SYSTEM
(Easterbrook, JLS 1983)
• Criminal Procedure Market System:
– Prosecutorial Discretion:
• European compulsory prosecution model is inevitably
ineffective;
• Rules produce behavior to escape clauses: outcomes
are arbitrary and unexpected.
• Market Failure objections:
– Prosecutor does not seek to maximize social welfare;
» Agency costs.
– Results are inequitable.
» The Role of ex post equality in defining fair treatment
CRIMINAL PROCEDURE AS A
MARKET SYSTEM
(Easterbrook, JLS 1983)
• Criminal Procedure Market System:
– Efficient Prosecution:
•
•
•
•
Decision not to prosecute;
Selective prosecution;
Selection of charge;
Upping the Ante.
– Domination of the Grand Jury
• Limit private prosecution
• Discovery
CRIMINAL PROCEDURE AS A
MARKET SYSTEM
(Easterbrook, JLS 1983)
• Criminal Procedure Market System:
– Plea-Bargaining:
• Price-establishing function at low cost
• Market failure arguments:
– Defendants’ lawyers will use it to undermine the
interests of the accused.
– Discrimination against poor defendants.
– No voluntary sales by defendants of their rights.
» Reward for pleading guilty or a penalty for
insisting on trial?
CRIMINAL PROCEDURE AS A
MARKET SYSTEM
(Easterbrook, JLS 1983)
• Criminal Procedure Market System:
– Efficient rules of plea-bargaining:
• Plea-Bargains are Binding
– Written contract
• Unconscionable Pleas can be Binding
• Broken Bargains
– Deal is off.
• Involvement of the Judge in Bargaining
– Should be limited because has less access to evidence
than prosecutor.
CRIMINAL PROCEDURE AS A
MARKET SYSTEM
(Easterbrook, JLS 1983)
• Criminal Procedure Market System:
– Sentencing Discretion:
• Price discrimination;
• Reduction of information costs;
• Market Failure Objections:
– Inequitable sentencing:
» Ex ante expected penalties are the same;
» Elimination of discretion does not reduce ex post
inequality;
» Why should criminals have a moral claim to
equal treatment when the costs fall on the law
abiding?
• Notice the recent debate over sentencing guidelines.
JURISDICTIONAL COMPETITION IN
CRIMINAL JUSTICE
• Competitive federalism in Criminal Justice.
–
–
Europe (Schengen): Garoupa, 1997 IRLE
US: Doron, 2004 Michigan LR
• Problems:
– Displacing crime;
– Displacing criminals.
• Regulating the Market for Criminal Justice
– Race to Bottom: displacement.
– Race to Top: raise probability of detection.
– Local solutions vs. central planners (federal
criminal law).