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Private versus Public Enforcement of Fines

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  • A. Mitchell Polinsky

Abstract

The present paper analyzes the competitive, monopolistic, and public enforcement of fines allowing for the costs of enforcement to differ by the choice of the enforcer. There are a number of reasons to expect such differences. First, the benefits from coordinating enforcement -- for example, avoiding duplication of investigative effort and exploiting economies of scale in information processing -- are obtained under public enforcement and monopolistic enforcement, but not under competitive enforcement. Second, the profit motive might be imagined to lead to lower costs under either form of private enforcement relative to public enforcement. Third, when the revenue from fines under public enforcement is not sufficient to finance enforcement costs, there may be a deadweight burden incurred in making up the deficit from other sources. Conversely, if the fine revenue exceeds enforcement costs, the effective cost of enforcement would be lower. On balance, these considerations suggest that monopolistic enforcement may be cheaper than competitive enforcement, but that public enforcement could be more or less expensive than private enforcement.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0338.

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Date of creation: Apr 1979
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Publication status: published as Polinsky, A. Mitchell. "Private versus Public Enforcement of Fines." The Journal of Legal Studies, Vol. IX, No. 1, (January 1980), pp. 105-127.
Handle: RePEc:nbr:nberwo:0338

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Cited by:
  1. Polinsky, A. Mitchell & Shavell, Steven, 2001. "Corruption and optimal law enforcement," Journal of Public Economics, Elsevier, vol. 81(1), pages 1-24, July.
  2. Mohamed Jellal & Nuno Garoupa, 1999. "Optimal law enforcement under asymmetric information," Economics Working Papers 401, Department of Economics and Business, Universitat Pompeu Fabra.
  3. A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 562-570, Winter.
  4. Steven Shavell, 2003. "Economic Analysis of the General Structure of the Law," NBER Working Papers 9699, National Bureau of Economic Research, Inc.
  5. Anna Rita Germani, 2007. "The Environmental Enforcement in the Civil and the Common Law Systems. A Case on the Economic Effects of Legal Institutions," Quaderni DSEMS 22-2007, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
  6. A. Mitchell Polinsky, 1986. "Detrebling versus Decoupling Antitrust Damages: Lessons from the Theory of Enforcement," NBER Working Papers 1846, National Bureau of Economic Research, Inc.
  7. Nuno Garoupa & Mohamed Jellal, 2002. "A Note on Optimal Law Enforcement under Asymmetric Information," European Journal of Law and Economics, Springer, vol. 14(1), pages 5-13, July.
  8. A. Mitchell Polinsky & Steven Shavell, 1982. "The Optimal Use of Fines and Imprisonment," NBER Working Papers 0932, National Bureau of Economic Research, Inc.
  9. Elizabeth Robinson, 2004. "Wanted dead and alive: Are hunting and protection of endangered species compatible?," Economics Series Working Papers WPS/2004-20, University of Oxford, Department of Economics.
  10. Steven Shavell, 1981. "The Social versus the Private Incentive to Bring Suit in a Costly Legal System," NBER Working Papers 0741, National Bureau of Economic Research, Inc.

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