…there must be a proportion between crimes and punishments.
Cesare Beccaria (1764 [1986], p. 14).
Abstract
Practitioners of the modern economic theory of crime acknowledge the influence of the eighteenth century writers Montesquieu, Beccaria, and Bentham, whose theories of crime and punishment clearly presaged the economic approach. An important value espoused by all of these writers is proportionality between punishments and crimes, both as an end in itself and as a means of achieving marginal deterrence. This essay asks how closely the concept of proportionality is reflected in the prescriptions of the economic theory. The answer turns out to depend both on how proportionality is defined and on the assumptions underlying the enforcement regime.
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Notes
However, recent Supreme Court decisions have ruled that legislative sentencing guidelines are advisory rather than mandatory. See United States v. Fanfan and United States v. Booker, 543 U.S. 220 (2005). See Miceli (2008) for an economic analysis of sentencing discretion in the context of the economic model of crime.
For a comprehensive discussion of how proportionality principles enter American law, see Sullivan and Frase (2008).
See, for example, Adelstein (1981), who emphasizes the universality of the proportionality norm in modern jurisprudence.
It is conventional to assume, as Becker did, that the offender’s gains from crime count in welfare. Most of the qualitative conclusions of the model do not depend on that assumption. For a discussion of the propriety of the assumption, see Stigler (1970) and Lewin and Trumbull (1990). Also see the discussion below of the “gain-based” fine in (3).
I am focusing here on the basic economic model that is exclusively concerned with deterrence. It is of course possible to extend the model to explicitly account for fairness or proportionality in punishment as a distinct social value. See, for example, Miceli (1991) and Polinsky and Shavell (2000). My interest here, however, is on evaluating the policies arising from the pure deterrence model in relation to the proposals of the philosophers.
The first-order condition for f is—(pf − h)z(pf)p = 0, which implies that pf = h.
Though in the case of repeat offenders, scaling may penalize offenders for crimes that they themselves got away with in the past, which seems less unfair. This is the logic underlying the economic theory of punitive damages (Cooter 1982).
The formula in (2) would also achieve complete deterrence under the assumption that criminal gains count in welfare, because in that case it is only efficient to deter all crimes if the harm from the act, h, exceeds the highest gain among potential offenders [i.e., \( h > \bar{g} \) in (1)]. If offenders gains do not count in welfare, however, then any harmful acts should be deterred, and the formula in (2) would not necessarily accomplish this goal whereas (3) always would.
A separate question that is side-stepped by the economic theory of crime is whether to categorize certain harmful acts as “crimes” or “torts,” and more generally, why both categories are needed. This turns out to be a difficult question that has defied a clear answer. See, for example, the discussion in Chapter 18 of Friedman (2000).
Note that this assumption only holds when offenders are risk-neutral. If they are risk-averse, then a less certain punishment (i.e., lower p) would itself have a deterring effect even if pf remains constant because it increases risk. The reverse would be true if offenders are risk-loving.
The first-order condition for (1) is (h − pw)g(pw) = c′(p), which implies that h > pw at the optimum.
This conclusion follows by differentiating the first-order condition for p*, which shows that ∂p*/∂h > 0, assuming that the second-order condition for a maximum is satisfied.
Friehe and Miceli (2014) show that the fine for the first act may not be maximal, even with specific performance, if offenders act sequentially—that is, decide whether or not to commit the second act only after committing the first.
Wilde’s concept of general enforcement is not, however, exactly the same as Shavell’s. In particular, the probability of apprehension can be different in Wilde’s model, despite fixed enforcement effort, because he allows a different apprehension function. In contrast, Shavell assumes a common apprehension function. Thus, the results in Shavell and Wilde for the case of general enforcement are not strictly comparable.
See, for example, Sullivan and Frase (2008), especially Chapter 7.
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I acknowledge the helpful comments of Richie Adelstein and two reviewers.
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Miceli, T.J. On proportionality of punishments and the economic theory of crime. Eur J Law Econ 46, 303–314 (2018). https://doi.org/10.1007/s10657-016-9524-5
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DOI: https://doi.org/10.1007/s10657-016-9524-5