IDEAS home Printed from https://ideas.repec.org/p/uct/uconnp/2010-03.html
   My bibliography  Save this paper

Private Law Enforcement, Fine Sharing, and Tax Collection: Theory and Historical Evidence

Author

Listed:
  • Metin M. Cosgel

    (University of Connecticut)

  • Haggay Etkes

    (Bank of Israel)

  • Thomas J. Miceli

    (University of Connecticut)

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 fine collection because, by maximizing net expected revenue, they ignore the social benefits of deterrence. We show that this problem can be partially resolved by combining the tasks of law enforcement with tax collection because a joint enforcer-collector will have an interest in reducing the crime rate in order to maximize his income from taxes. 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

  • Metin M. Cosgel & Haggay Etkes & Thomas J. Miceli, 2010. "Private Law Enforcement, Fine Sharing, and Tax Collection: Theory and Historical Evidence," Working papers 2010-03, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2010-03
    as

    Download full text from publisher

    File URL: https://media.economics.uconn.edu/working/2010-03.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Benson, Bruce L & Rasmussen, David W & Sollars, David L, 1995. "Police Bureaucracies, Their Incentives, and the War on Drugs," Public Choice, Springer, vol. 83(1-2), pages 21-45, April.
    3. Besanko, David & Spulber, Daniel F, 1989. "Delegated Law Enforcement and Noncooperative Behavior," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(1), pages 25-52, Spring.
    4. Polinsky, A. Mitchell & Shavell, Steven, 2001. "Corruption and optimal law enforcement," Journal of Public Economics, Elsevier, vol. 81(1), pages 1-24, July.
    5. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
    6. 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.
    7. Polinsky, A. Mitchell & Shavell, Steven, 2007. "The Theory of Public Enforcement of Law," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 1, chapter 6, pages 403-454, Elsevier.
    8. George J. Stigler, 1974. "The Optimum Enforcement of Laws," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 55-67, National Bureau of Economic Research, Inc.
    9. Bennett,H. S., 1937. "Life on the English Manor," Cambridge Books, Cambridge University Press, number 9780521091053.
    10. Wheaton, William C., 2006. "Metropolitan fragmentation, law enforcement effort and urban crime," Journal of Urban Economics, Elsevier, vol. 60(1), pages 1-14, July.
    11. Metin M. CoÅŸgel & Thomas J. Miceli, 2009. "Tax Collection in History," Public Finance Review, , vol. 37(4), pages 399-420, July.
    12. Alfred N. May, 1973. "An Index of Thirteenth-Century Peasant Impoverishment? Manor Court Fines," Economic History Review, Economic History Society, vol. 26(3), pages 389-402, August.
    13. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    14. Nuno Garoupa (ed.), 2009. "Criminal Law and Economics," Books, Edward Elgar Publishing, number 12729.
    15. Nuno Garoupa & Daniel Klerman, 2002. "Optimal Law Enforcement with a Rent-Seeking Government," American Law and Economics Review, Oxford University Press, vol. 4(1), pages 116-140, January.
    16. 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 1, number maitland1898a.
    17. 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.
    18. Helsley, Robert W. & Strange, William C., 1999. "Gated Communities and the Economic Geography of Crime," Journal of Urban Economics, Elsevier, vol. 46(1), pages 80-105, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. Zhiyong (John) Liu & Zhewei Wang & Zhendong Yin, 2022. "When is duplication of effort a good thing in law enforcement?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(4), pages 682-708, August.
    3. Belev, Sergei (Белев, Сергей) & Zolotareva, Anna (Золотарев, Анна) & Malayrev, Aleksandr (Малайрев, Александр) & Sokolov, Ilya (Соколов, Илья), 2015. "Structural Alternatives to the Tax Administration [Структурные Альтернативы Налогового Администрирования]," Published Papers mn13, Russian Presidential Academy of National Economy and Public Administration.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhiyong (John) Liu & Zhewei Wang & Zhendong Yin, 2022. "When is duplication of effort a good thing in law enforcement?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(4), pages 682-708, August.
    2. Eide, Erling & Rubin, Paul H. & Shepherd, Joanna M., 2006. "Economics of Crime," Foundations and Trends(R) in Microeconomics, now publishers, vol. 2(3), pages 205-279, December.
    3. Yahagi, Ken, 2021. "Law enforcement with motivated agents," International Review of Law and Economics, Elsevier, vol. 66(C).
    4. A. Mitchell Polinsky & Steven Shavell, 2009. "Public Enforcement of Law," Chapters, in: Nuno Garoupa (ed.), Criminal Law and Economics, chapter 1, Edward Elgar Publishing.
    5. 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.
    6. Robson Fernandes Soares & Edson Ronaldo Guarido Filho, 2021. "Anti-Corruption Enforcement and Organizations: A Narrative Review," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 25(6), pages 190149-1901.
    7. Antonio Acconcia & Marcello D'Amato & Riccardo Martina, 2003. "Corruption and Tax Evasion with Competitive Bribes," CSEF Working Papers 112, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    8. Giovanni Immordino & Marco Pagano, 2010. "Legal Standards, Enforcement, and Corruption," Journal of the European Economic Association, MIT Press, vol. 8(5), pages 1104-1132, September.
    9. Garoupa, Nuno & Klerman, Daniel, 2004. "Corruption and the optimal use of nonmonetary sanctions," International Review of Law and Economics, Elsevier, vol. 24(2), pages 219-225, June.
    10. Giovanni Immordino & Marco Pagano & Michele Polo, 2006. "Norm Flexibility and Private Initiative," Working Papers 314, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    11. Pradiptyo, Rimawan, 2012. "Does Corruption Pay in Indonesia? If So, Who are Benefited the Most?," MPRA Paper 41384, University Library of Munich, Germany.
    12. Baumann, Florian & Friehe, Tim, 2015. "Status concerns as a motive for crime?," International Review of Law and Economics, Elsevier, vol. 43(C), pages 46-55.
    13. Salvatore Capasso & Rajeev K. Goel & James W. Saunoris, 2019. "Is it the gums, teeth or the bite? Effectiveness of dimensions of enforcement in curbing corruption," Economics of Governance, Springer, vol. 20(4), pages 329-369, December.
    14. Thomas J. Miceli & Murat C. Mungan, 2021. "The limit of law: factors influencing the decision to make harmful acts illegal," Economics of Governance, Springer, vol. 22(3), pages 293-307, September.
    15. Andrew Samuel & Ajit Mishra, 2022. "Does it matter who extorts? Extortion by competent and incompetent enforcers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(3), pages 328-344, July.
    16. Jan U. Auerbach, 2019. "Property rights enforcement with unverifiable incomes," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 68(3), pages 701-735, October.
    17. Polinsky, A. Mitchell & Shavell, Steven, 2007. "The Theory of Public Enforcement of Law," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 1, chapter 6, pages 403-454, Elsevier.
    18. Thomas J. Miceli, 2021. "Should Offenders’ Gains Be Counted? On Efficient Crimes and Unjust Laws," Working papers 2021-02, University of Connecticut, Department of Economics.
    19. Dhammika Dharmapala & Nuno Garoupa & Richard H. McAdams, 2016. "Punitive Police? Agency Costs, Law Enforcement, and Criminal Procedure," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 105-141.
    20. Rimawan Pradiptyo, 2015. "A Certain Uncertainty; Assessment of Court Decisions in Tackling Corruption in Indonesia," World Scientific Book Chapters, in: R N Ghosh & M A B Siddique (ed.), CORRUPTION, GOOD GOVERNANCE and ECONOMIC DEVELOPMENT Contemporary Analysis and Case Studies, chapter 10, pages 167-215, World Scientific Publishing Co. Pte. Ltd..

    More about this item

    Keywords

    Criminal fines; deterrence; private law enforcement; tax collection;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uct:uconnp:2010-03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark McConnel (email available below). General contact details of provider: https://edirc.repec.org/data/deuctus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.