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The Theory of Penalties and the Economics of Criminal Law

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  • Hylton Keith N

    (Boston University School of Law)

Abstract

This paper presents a model of penalties that reconciles the conflicting accounts of optimal punishment by Becker, who argued penalties should internalize social costs, and Posner, who suggested penalties should completely deter offenses. The model delivers specific recommendations as to when penalties should be set to internalize social costs and when they should be set to completely deter offensive conduct. One basic recommendation is that whenever the cost of transacting with respect to some entitlement is less than the cost of enforcing the right to that entitlement, penalties should be set to completely deter. I use the model to generate a positive account of the function and scope of criminal law doctrines, such as intent, necessity, and rules governing the distinction between torts and crimes. The model is also consistent with the history of criminal penalties set out by Adam Smith.

Suggested Citation

  • Hylton Keith N, 2005. "The Theory of Penalties and the Economics of Criminal Law," Review of Law & Economics, De Gruyter, vol. 1(2), pages 175-201, September.
    • Handle: RePEc:bpj:rlecon:v:1:y:2005:i:2:n:1
    DOI: 10.2202/1555-5879.1024
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    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. Hasen, Richard L. & McAdams, Richard H., 1997. "The surprisingly complex case against theft," International Review of Law and Economics, Elsevier, vol. 17(3), pages 367-378, September.
    3. Ben-Shahar, Omri & Harel, Alon, 1995. "Blaming the Victim: Optimal Incentives for Private Precautions against Crime," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 434-455, October.
    4. McChesney, Fred S., 1993. "Boxed in: Economists and benefits from crime," International Review of Law and Economics, Elsevier, vol. 13(2), pages 225-231, June.
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    Citations

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    Cited by:

    1. Alfred Endres & Bianca Rundshagen, 2012. "Escalating penalties: a supergame approach," Economics of Governance, Springer, vol. 13(1), pages 29-49, March.
    2. Mark D. White, 2018. "The neglected nuance of Beccaria’s theory of punishment," European Journal of Law and Economics, Springer, vol. 46(3), pages 315-329, December.
    3. Cain Michael, 2016. "An Economic Assessment of Criminal Behaviour," Review of Law & Economics, De Gruyter, vol. 12(1), pages 77-94, March.
    4. Rizzolli Matteo, 2009. "Building Encroachments," Review of Law & Economics, De Gruyter, vol. 5(1), pages 661-700, November.
    5. Thomas J. Miceli, 2018. "On proportionality of punishments and the economic theory of crime," European Journal of Law and Economics, Springer, vol. 46(3), pages 303-314, December.
    6. Thomas J. Miceli, 2022. "Counting offenders’ gains? Economic and moral considerations in the determination of criminality," European Journal of Law and Economics, Springer, vol. 54(3), pages 475-496, December.
    7. Philip A. Curry & Matthew Doyle, 2016. "Integrating Market Alternatives Into The Economic Theory Of Optimal Deterrence," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1873-1883, October.
    8. Buehler, Stefan & Eschenbaum, Nicolas, 2020. "Explaining escalating prices and fines: A unified approach," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 153-164.

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