Criminal Law

Chapter 15- Laws Order

What should we aim for in criminal law?
A punishment combination of punishment and
the probability of getting punished that imposes
the damage done on the one doing it.
Only efficient crimes should be done
How?
Setting expected punishment equals to damage
done
How?
Modifying the law so that efficient crimes are no
longer criminal (special circumstances)


Models for Criminal Law
Ideal
Enough punishment to deter
Enough punishment to eliminate all and only
inefficient offenses
However most crimes are inefficient
The damage to the victim is more than the damage
to the criminal
Does not even fit the Pigouvian prescription:
expected punishment= damage done
The reason we dont catch all, or even almost all,
murderers is that doing so would cost more than It is
worth
How do we deter crime?
We must catch offenders and punish them.
But both are costly so consider costs in the
punishment that will be imposed.
Punishment cost
Difference between the costs the punishment
imposes on the criminal and the benefit it provides
to others

Net cost of punishment= criminals loss + enforcement systems loss

As we increase the severity of the punishment,
the punishment cost per offense punished
increases.
Efficient Punishment?
Efficient punishment lottery solution
An infinitely severe punishment imposed with an
infinitesimal probability
However, as punishment increases we are forced to shift
to less efficient punishments, raising the punishment cost.
An efficient system will accordingly choose, among
combinations of punishment and probability that are
equivalent from the standpoint of the offender and so
have the same deterrent effect, the one that minimizes
the sum of punishment cost and apprehension cost.
Whatever level of deterrence we provide will be
provided by the least cost combination of punishment and
probability.
How much deterrence?
The rule prevent all and inefficient offenses
and only inefficient offenses is correct only if
doing so is costless.

How much deterrence?
The correct rule in the more general case is to
prevent an offense if and only if the net cost
from the offense occurring is greater than the
cost of preventing it.
A system with higher punishments and thus
fewer offenses then costs less than a system with
lower punishment and more offenses.
Theory of Optimal Punishment
Cost of deterring one more offense= Net damage
= damage to victim expected punishment,
Since expected punishment= gain to criminal
If the cost of deterring one more offense is
Positive: set expected punishment below damage
done
Supply of offenses is very inelastic so it takes a lot of increased
punishment to deter an offense
Negative: set expected punishment above damage
done
Supply of offenses is very elastic that a small increase of
punishment deters a lot of offenses
Theory of Optimal Punishment
Therefore, optimum is punishment=damage done
If catching and punishing criminals is easy and inexpensive
When marginal cost of deterring offenses is low, we
want to set damages roughly equal to the damage done.
Why do we count benefits to criminals?
One should design legal rules to maximize the
size of the pie
It assumes nothing at all about the sorts of
things we expect legal and ethical rules to be
based on.

Why do we count benefits to
criminals?
Why?
Somehow we get
more than what we
put in
Even if we agree
that it is good to
prevent crimes, we
must still decide how
good it is and hence
how hard it is worth
trying to do it


Why do we count benefits to
criminals?
Therefore, economic analysis should give equal
weight to costs and benefits of murderer and
victim.
The most efficient punishment of all
Stigma
Can cause
Loss of income
Loss in corporate value (measured in stock value)
Loss of value, on average, was many times higher
than the highest fine that would be imposed if the charges
were true [reputation loss]
Information
a form of punishment with net negative cost, one
that benefits other people more than it hurts the
person being punished
Efficient if the accused is guilty; inefficient if the
accused is not guilty
Should the rich pay higher fines?
Once you take account of enforcement cost, the optimal
punishment depend not only on damage done but also on
how hard it is to deter offenses.
Stealing a hundred dollars provides the same amount of
money to a rich man and a poor man
Time of rich man is worth more than poor mans: therefore he
is more likely to be deterred by a lower fine compared to poor man
Fines are more efficient than imprisonment, and rich
offenders can pay higher fines.
Punishment costs should decrease as income rises, which
implies a higher efficient level of punishment for rich offenders.
But rich offenders can also pay for better lawyers.
Punishing rich criminals is cheaper, but convicting them is
more expensive.
Incapacitation
Produces a net benefit
Saves the cost of catching him, the cost of
punishing him, and the net damage done by the
crime, which is almost always positive
Arguments for incapacitation
Reduces a criminals opportunity to commit
crimes
Gives an opportunity to rehabilitate them
What if, instead of one, there are two crimes
considered at a time?
Raising the punishment for one may deter the
criminal into committing the other instead.
Crime rates are more sensitive to probability
than punishment
Criminals are risk-preferrers
Why not hang them all?
An efficient legal system will make no use of
imprisonment
Defendants who can pay fines will be fines,
those who cant will be executed
Or give them options, if they cant pay [fines or
less attractive punishments like
imprisonment/probabilistic execution, paying off their
stay with work]
Or make execution more efficient [sell corpses
to surgeons, harvest organs]
So different from reality
Execution or Imprisonment?
Both are irreversible and expensive, but
imprisonment is more generally accepted
compared to execution
It will be interesting if we can show that the
institutions our tastes favour are in fact efficient,
implying that our peculiar tastes are actually an
efficient set of norms.
Cannibalism, Rent Seeking, and Rape
On cannibalism
If youre dead you have no more use for your
body, so why not let someone else get some
useful protein out of it?
Ban on cannibalism= so that most people most
of the time have no good reason to kill each other
Cannibalism, Rent Seeking, and Rape
On rape
Really serious crime
In cases of well-off people, only trusted men
could have access to women
Women would be locked up and protected, and
this is very costly
We attempt to solve it by treating it as a serious
crime
Cannibalism, Rent Seeking, and Rape
Organ Market how to regulate?
Legalize market?
It gives individuals an incentive to sell the rights
to their organs in advance
Against organ market legalization:
Rent seeking problem
Incentive to kidnap people and dismember
them
Solution
Market with adequate precautions to establish
chain of title to any organs sold
Legal regime: Organs could be sold by owner
in advance or at time of death, but not resold