Optimal Deterrence with Legal Defence Expenditure
AbstractLegal defence expenditure by those accused of a crime reduces their probability of punishment (whether innocent and guilty). We show that there could be more or less crime in a system which permits such expenditure. Because accused may choose a level of defence expenditure which bankrupts them if found guilty, deterrence can decrease when the fine is increased. The unregulated expenditure of innocent and guilty defendants is inefficient. We show that the optimal fine will never bankrupt the dishonest accused but that the honest accused can be bankrupt or left with positive wealth if convicted. We examine policies to regulate defence expenditure including a tax financed public defender system, a tax on legal defence and compensation for acquitted accused.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, University of York in its series Discussion Papers with number 00/08.
Date of creation:
Date of revision:
Contact details of provider:
Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
More information through EDIRC
Legal defence; deterrence; legal aid;
Other versions of this item:
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ehrlich, Isaac, 1982. "The optimum enforcement of laws and the concept of justice: A positive analysis," International Review of Law and Economics, Elsevier, vol. 2(1), pages 3-27, June.
- Lott, John R, Jr, 1987. "Should the Wealthy Be Able to "Buy Justice"?," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1307-16, December.
- Polinsky, A Mitchell & Shavell, Steven, 1991.
"A Note on Optimal Fines When Wealth Varies among Individuals,"
American Economic Review,
American Economic Association, vol. 81(3), pages 618-21, June.
- A. Mitchell Polinsky & Steven Shavell, 1991. "A Note on Optimal Fines When Wealth Varies Among Individuals," NBER Working Papers 3232, National Bureau of Economic Research, Inc.
- A. Mitchell Polinsky & Steven Shavell, 1999.
"The Economic Theory of Public Enforcement of Law,"
NBER Working Papers
6993, National Bureau of Economic Research, Inc.
- Png, I. P. L., 1986. "Optimal subsidies and damages in the presence of judicial error," International Review of Law and Economics, Elsevier, vol. 6(1), pages 101-105, June.
- Louis Kaplow & Steven Shavell, 1991.
"Legal Advice about Acts Already Commited,"
NBER Working Papers
3005, National Bureau of Economic Research, Inc.
- Polinsky, Mitchell & Shavell, Steven, 1979. "The Optimal Tradeoff between the Probability and Magnitude of Fines," American Economic Review, American Economic Association, vol. 69(5), pages 880-91, December.
- Dnes, Antony W, 1996. "An Economic Analysis of the BSE Scare," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(3), pages 343-48, August.
- Miceli, Thomas J., 1991. "Optimal criminal procedure: Fairness and deterrence," International Review of Law and Economics, Elsevier, vol. 11(1), pages 3-10, May.
- Garoupa, Nuno, 1997. " The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-95, September.
- Nuno Garoupa & Jonathan Klick & Francesco Parisi, 2006.
"A law and economics perspective on terrorism,"
Springer, vol. 128(1), pages 147-168, July.
- Shastitko, A., 2011. "Errors of I and II Types in Economic Exchanges with Third Party Enforcement," Journal of the New Economic Association, New Economic Association, issue 10, pages 125-148.
- Echazu, Luciana & Garoupa, Nuno, 2012. "Why not adopt a loser-pays-all rule in criminal litigation?," International Review of Law and Economics, Elsevier, vol. 32(2), pages 233-241.
- Garoupa, Nuno & Stephen, Frank, 2003. "A Note on Optimal Law Enforcement with Legal Aid," CEPR Discussion Papers 4113, C.E.P.R. Discussion Papers.
- Neil Rickman & Dionisia Tzavara, 2005. "Optimal Pricing of Court Services," European Journal of Law and Economics, Springer, vol. 20(1), pages 31-41, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Hodgson).
If references are entirely missing, you can add them using this form.