Plea Bargaining with Budgetary Constraints and Deterrence

In this paper, I construct a simple model that illustrates conditions under which increased criminal sanctions can lead to increased levels of crime. This finding is derived from the interaction of binding budgetary con- straints and plea bargaining, given that the costs of trial are assumed to be increasing in the size of sanction. In an environment with these institutional features, maximal sanctions are not optimal when resources are limited, and increased sanctions cannot generally be viewed as a sub- stitute for increased monitoring. In this framework, increasing sanctions for different offences proportionally can lead criminals to substitute be- tween offences. In fact, increased sanctions can lead to more severe crime. This effect is unambiguous when the marginal cost of trial is constant or increasing. The increasing cost of trial can imply that even when a pro- portional sanction increase implies a reduction in total crime levels it may imply an increase in severe offences, since some minor criminals will sub- stitute into more severe crimes. This model also suggests that increased resources for prosecutors deter crime.