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Private law enforcement, fine sharing, and tax collection: Theory and historical evidence

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  • Coşgel, Metin M.
  • Etkes, Haggay
  • Miceli, Thomas J.

Abstract

This paper contributes to the literature on private law enforcement by proposing a novel solution to the problem of underenforcement by monopolistic enforcers. Monopolistic enforcers underinvest in enforcement because they ignore the social benefits of deterrence. We show that this problem can be partially resolved by combining law enforcement with tax collection because a joint enforcer-collector will have an interest in reducing the crime rate in order to maximize his tax income. In support of the theory, we discuss two historical examples of this practice: decentralized law enforcement under European feudalism, and centralized law enforcement in the Ottoman Empire.

Suggested Citation

  • Coşgel, Metin M. & Etkes, Haggay & Miceli, Thomas J., 2011. "Private law enforcement, fine sharing, and tax collection: Theory and historical evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 546-552.
  • Handle: RePEc:eee:jeborg:v:80:y:2011:i:3:p:546-552
    DOI: 10.1016/j.jebo.2011.05.013
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    References listed on IDEAS

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    2. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
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    5. Besanko, David & Spulber, Daniel F, 1989. "Delegated Law Enforcement and Noncooperative Behavior," Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(1), pages 25-52, Spring.
    6. Polinsky, A. Mitchell & Shavell, Steven, 2001. "Corruption and optimal law enforcement," Journal of Public Economics, Elsevier, vol. 81(1), pages 1-24, July.
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    8. Pollock, Sir Frederick & Maitland, Frederic William, 1898. "History of English Law Before the Time of Edward I," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 2, volume 2, number maitland1898b.
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    12. Garoupa Nuno & Klerman Daniel M., 2010. "Corruption and Private Law Enforcement: Theory and History," Review of Law & Economics, De Gruyter, vol. 6(1), pages 75-96, April.
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    Cited by:

    1. Berno Buechel & Gerd Muehlheusser, 2016. "Black Sheep or Scapegoats? Implementable Monitoring Policies under Unobservable Levels of Misbehavior," The Journal of Legal Studies, University of Chicago Press, vol. 45(2), pages 331-366.
    2. Belev, Sergei & Zolotareva, Anna & Malayrev, Aleksandr & Sokolov, Ilya, 2015. "Structural Alternatives to the Tax Administration," Published Papers mn13, Russian Presidential Academy of National Economy and Public Administration.

    More about this item

    Keywords

    Criminal fines; Deterrence; Private law enforcement; Tax collection;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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