Asset Forfeiture Laws and Criminal Deterrence

Derek Johnson and Thomas Miceli
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Derek Johnson: University of Connecticut

No 2013-27, Working papers from University of Connecticut, Department of Economics

Abstract: Asset forfeiture laws allow the seizure of assets used in the commission of a crime. This paper examines the impact of such laws on deterrence by incorporating the possibility of asset forfeiture into the standard economic model of crime. When punishment is by a fine that can be optimally chosen, forfeiture is never optimal because of the deadweight loss it imposes in the capital market. When the fine is limited by the offender’s wealth, forfeiture may or may not be desirable. Extensions of the basic model include the optimal use of forfeiture when (i) partial seizure is possible, (ii) punishment is by imprisonment, (iii) the probability of apprehension is endogenous, and (iv) enforcers are rent-seekers.

Keywords: Criminal punishment; asset forfeiture; law enforcement (search for similar items in EconPapers)
JEL-codes: H11 K14 K41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2013-09
New Economics Papers: this item is included in nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2013-27

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