Society should give criminals incentives not to conceal their criminal activity. The concealment costs themselves are a social waste, as are other costs the concealment may impose on society, such as additional harm or increased law enforcement expenditures. I show that for any set of sanctions that lead to positive concealment on behalf of the criminal, that society can modify the sanctions to give the criminal an incentive not to conceal and unambiguously improve social welfare. A similar conclusion will apply to increasing the costs of concealment devices to improve social welfare. Society can deter concealment of crime by raising the sanction or raising the cost of concealing the crime. Which policy is chosen should depend upon the concealment device involved. If it is easy to detect the use of a concealment device when a person is caught, then penalties should be imposed on the criminal for using such a concealment device. If the device is of the type that has no legitimate purpose other than being used for concealment, then the device should be heavily taxed or be outlawed. For situations where we are unable to determine whether the device has been used to conceal and the device has legitimate purpose, society should set one penalty for the crime, and possibly a generalized additional sanction for any concealment of the crime that can be determined.
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Paper provided by EconWPA in its series Law and Economics with number
9507001.
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