Choosing Punishment

Abstract

This Article sets forth two propositions. First, at a policy-making level, it is easier to punish than it is to regulate. That is, it is easier to attract public and political support for state-sponsored punishment than it is to attract similar support for regulation. “Punishment,” as defined in this Article, includes any retributively motivated government action or response.

Second, this preference for punishment may not be particularly healthy. No doubt, there are many good reasons for supporting the government when it imposes just deserts or communicates the public’s moral condemnation. Moreover, it is likely impossible to eradicate retributive motivations that are hard-wired into our collective DNA. But the resources we spend on punishment are resources that might be spent elsewhere. Even worse, by overemphasizing punishment, we may undermine and crowd out the non-punitive, regulatory alternatives that are more adept at averting disastrous outcomes in the first place. Accordingly, we should worry about punishment’s effect on all government institutions, and not just on the criminal justice system.

This Article begins that task by focusing on corporate governance regulation and policy. The Article opens by explaining why public actors choose retributive responses and theorizes how those responses are likely to affect the legal institutions that dominate corporate governance law. The Article then tackles the normative point. Although punishment offers a number of benefits, it may leave society worse off over the long term. The Article concludes with suggestions for further inquiry.

Keywords: Punishment, retribution, corporate governance, psychology, law and economics, regulation, criminal law