The Theory of Public Enforcement of Law

A. Mitchell Polinsky () and Steven Shavell ()

No 11780, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This chapter of the forthcoming Handbook of Law and Economics surveys the theory of the public enforcement of law %u2013 the use of governmental agents (regulators, inspectors, tax auditors, police, prosecutors) to detect and to sanction violators of legal rules. The theoretical core of our analysis addresses the following basic questions: Should the form of the sanction imposed on a liable party be a fine, an imprisonment term, or a combination of the two? Should the rule of liability be strict or fault-based? If violators are caught only with a probability, how should the level of the sanction be adjusted? How much of society%u2019s resources should be devoted to apprehending violators? We then examine a variety of extensions of the central theory, including: activity level; errors; the costs of imposing fines; general enforcement; marginal deterrence; the principal-agent relationship; settlements; self-reporting; repeat offenders; imperfect knowledge about the probability and magnitude of sanctions; corruption; incapacitation; costly observation of wealth; social norms; and the fairness of sanctions.

JEL-codes: D23 D62 D63 H23 H26 K14 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law, nep-pbe and nep-reg
Date: 2005-11
Note: LE
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