Private Law Enforcement, Fine Sharing, and Tax Collection: Theory and Historical Evidence

Metin Cosgel (), Haggay Etkes and Thomas Miceli

No 2010-03, Working papers from University of Connecticut, Department of Economics

Abstract: This paper contributes to the literature on private law enforcement by proposing a novel solution to the problem of underenforcement by monopolistic enforcers. Monopolistic enforcers underinvest in fine collection because, by maximizing net expected revenue, they ignore the social benefits of deterrence. We show that this problem can be partially resolved by combining the tasks of law enforcement with tax collection because a joint enforcer-collector will have an interest in reducing the crime rate in order to maximize his income from taxes. In support of the theory, we discuss two historical examples of this practice: decentralized law enforcement under European feudalism, and centralized law enforcement in the Ottoman Empire.

Keywords: Criminal fines; deterrence; private law enforcement; tax collection (search for similar items in EconPapers)
JEL-codes: H11 K42 N40 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-01
New Economics Papers: this item is included in nep-acc, nep-his, nep-law and nep-reg
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Journal Article: Private law enforcement, fine sharing, and tax collection: Theory and historical evidence (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2010-03

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