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The Scope of Punishment: An Economic Theory of Harm-Based vs. Act-Based Sanctions

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  • Garoupa, Nuno
  • Obidzinski, Marie

Abstract

The harm caused by many acts is not certain but probabilistic. Current public enforcement of the law combines harm-based sanctions (usually in criminal law) with act-based sanctions (very common in administrative law and regulation). We propose an economic theory of the choice between harm-based and act-based sanctions in public enforcement. The efficiency of act-based versus harm-based sanctions is analyzed and a typology of the determinants is drawn up. In the simple model with risk neutral offenders, both legal policies have the same deterrent level, but act-based sanctions end up punishing more people and the sanctions are lower. However when the assessment of the probability of harm diverges across individuals, the choice between harm-based or act-based sanctions depends on whether it is the enforcer or the average individual who is better informed. Legal policy implications are discussed.

Suggested Citation

  • Garoupa, Nuno & Obidzinski, Marie, 2006. "The Scope of Punishment: An Economic Theory of Harm-Based vs. Act-Based Sanctions," CEPR Discussion Papers 5899, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5899
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    References listed on IDEAS

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    1. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
    2. Shavell, Steven, 1990. "Deterrence and the Punishment of Attempts," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 435-466, June.
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    8. Dhammika Dharmapala & Nuno Garoupa, 2004. "Penalty Enhancement for Hate Crimes: An Economic Analysis," American Law and Economics Review, Oxford University Press, vol. 6(1), pages 185-207.
    9. Friedman, David D, 1991. "Impossibility, Subjective Probability, and Punishment for Attempts," The Journal of Legal Studies, University of Chicago Press, vol. 20(1), pages 179-186, January.
    10. Fon, Vincy & Parisi, Francesco, 2007. "On the optimal specificity of legal rules," Journal of Institutional Economics, Cambridge University Press, vol. 3(02), pages 147-164, August.
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    More about this item

    Keywords

    act-based sanction; harm-based sanction; uncertain harm;

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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