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Time-Consistent Criminal Sanctions

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  • Boadway, Robin
  • Marceau, Nicolas
  • Marchand, Maurice

Abstract

A classic argument in the theory of crime is that optimal enforcement policy should involve maximal sanctions combined with minimal detection costs. Yet this is rarely observed in the real world. We argue that reson for this has to do with the time inconsistency of such a policy. If sanctions are only applied after a crime has been committed, the enforcement authority are only reluctant to impose a high sanction since it will no longer have any deterrent effect. We show in a simple one period setting that if the enforcement authority can commit to its announced sanctions, the classic result is obtained. However, if the enforcement authority cannot commit, a minimal sanction with no enforcement effort is obtained. These extreme outcomes can be avoided in a setting in which crimes and enforcement occur repeatedly and the authority is able to build a reputation.

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Bibliographic Info

Article provided by in its journal Public Finance = Finances publiques.

Volume (Year): 51 (1996)
Issue (Month): 2 ()
Pages: 149-65

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Handle: RePEc:pfi:pubfin:v:51:y:1996:i:2:p:149-65

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Cited by:
  1. Dominique Demougin & Claude Fluet, 1999. "Costly Sanctions and the Maximum Penalty Principle," Cahiers de recherche CREFE / CREFE Working Papers 100, CREFE, Université du Québec à Montréal.
  2. Robin Boadway & Motohiro Sato, 2000. "The Optimality of Punishing Only the Innocent: The Case of Tax Evasion," International Tax and Public Finance, Springer, vol. 7(6), pages 641-664, December.
  3. Marceau, Nicolas & Mongrain, Steeve, 1999. "Dissuader le crime : un survol," L'Actualité Economique, Société Canadienne de Science Economique, vol. 75(1), pages 123-147, mars-juin.
  4. Suurmond, Guido, 2007. "The effects of the enforcement strategy," MPRA Paper 21142, University Library of Munich, Germany.
  5. Luigi Alberto Franzoni, 1995. "Prosecutorial Discretion and Criminal Deterrence," Working Papers 234, Dipartimento Scienze Economiche, Universita' di Bologna.
  6. Matthew J. Baker & Thomas J. Miceli, 2003. "Credible Criminal Enforcement," Working papers 2003-40, University of Connecticut, Department of Economics.
  7. M. Martin Boyer, 2001. "Resistance is Futile: An Essay in Crime and Commitment," CIRANO Working Papers 2001s-58, CIRANO.
  8. Joanne Roberts, 2000. "Plea Bargaining with Budgetary Constraints and Deterrence," Working Papers jorob-00-01, University of Toronto, Department of Economics.
  9. De Geest, Gerrit & Dari-Mattiacci, Giuseppe & Siegers, Jacques J., 2009. "Annullable bonuses and penalties," International Review of Law and Economics, Elsevier, vol. 29(4), pages 349-359, December.
  10. Jost, Peter-J, 2001. "Crime, coordination, and punishment: An economic analysis," International Review of Law and Economics, Elsevier, vol. 21(1), pages 23-46, March.

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