Plea Bargaining with Budgetary Constraints

Abstract

In this paper, we 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 constraints and plea bargaining. In an environment with these institutional features, maximal sanctions are not always optimal when resources are limited, and increased sanctions cannot generally be viewed as a substitute for increased monitoring. We show this result in two environments. First, when defendants have some bargaining power, and second, when defendants have some private information about their financial capacity to mount a defence. This model also suggests that increased resources for prosecutors deter crime.

Keywords: Plea bargaining, budget constraint, crime, prosecutor

JEL Classification: K42, K14