The Puzzle of Escalating Penalties for Repeat Offenders
David A. Dana
Northwestern University - Pritzker School of Law
A firmly entrenched principle in our legal system is that the severity of punishment for a given offense should depend in part on the offense history of the offender. Repeat offenders receive more severe punishment than first-time offenders; repeat offenders with many previous offenses receive more severe punishment than repeat offenders with few previous offenses. In an extreme application of this principle, some states now rachet up penalties for criminal offenders in such a way that the third offense triggers permanent imprisonment. While the three-strikes-and-you're-out approach is controversial, the general principle of escalating penalties based on offense history is widely accepted--indeed, it is so widely accepted that it strikes most people as simple "common sense." To a very substantial extent, the principle is embedded in formal federal, state, and administrative codes and in the enforcement norms of prosecutors and government officials at all levels of government.
For economists, however, the principle of escalating penalties based on offense history is extremely puzzling. In the standard economic model, the purpose of penalties is to deter conduct that creates greater social costs than benefits; where the system of penalties is calibrated to produce "optimal deterrence," offenses that produce net social costs will be deterred while offenses that produce net social benefits will go undeterred. Within this paradigm, the key factor in assessing the optimal penalty for a given offense is the social harm that will result from the offense. But the social harm from a given offense would seem to have nothing to do with the offense history of the offender; a theft causes its victim as much pain and inconvenience when the thief is a first-time offender as when he or she has a long history of such offenses. Thus, standard economic analysis would seem to suggest that, contrary to actual practice, penalties should not escalate based on offense history. Presented with this gap between theory and practice, a number of law and economics scholars have developed subtle analyses that purport to show that, at least under certain circumstances, the principle of escalating penalties based on offense history is consistent with the goal of inducing optimal deterrence.
One central claim of this Article is that the economic model of optimal deterrence cannot explain escalating penalties based on offense history and that, in fact, optimal deterrence analysis actually would support declining penalties based on offense history. The gap between economic theory and actual practice is thus even larger than the existing literature recognizes. This gap strongly suggests that we must look outside the conventional construct of optimal deterrence to understand the wide acceptance of the principle of escalating penalties based on offense history.
Part II of the Article reviews the existing literature that attempts to reconcile the goal of optimal deterrence with the principle of escalating penalties based on offense history. The critique of this literature is based, in part, on the fact that this literature either employs assumptions that are themselves inconsistent with economic analysis or it employs assumptions that have limited empirical foundation. At best, a conventional economic account can explain the general practice of escalating penalties only for offenses of a sort that invariably entail greater social costs than benefits (e.g., murder).
Part III builds on a manifestly important, but previously ignored, empirical reality: when an individual commits an offense and is caught and punished, the process by which she is caught and punished often generates information for public enforcement officials that would facilitate their catching and punishing the individual in the future were she to continue to engage in prohibited conduct. In other words, holding all other variables constant, people with "records" have a higher probability of having their offenses detected than people without records. This fact suggests that, in order to achieve the goal of optimal deterrence, our legal system should impose declining penalties based on offense history (rather than the opposite, as our system actually does). Part IV provides additional reasons why optimal deterrence supports declining penalties based on offense history.
Part V considers whether behavioral economics and cognitive psychology can help reconcile the theory of optimal deterrence and the principle of escalating penalties based on offense history. The opposite turns out to be true. The literature regarding salience bias--the bias toward exclusive or over-consideration of personal, recent, vivid experience--suggests that individuals who have recently been detected and punished for a violation should face reduced penalties because their recent detection and punishment experience will bolster their fears of future detection and punishment. The behavioral economics literature also suggests that individuals will be over-optimistic about their chances of avoiding detection of wrongdoing until they are actually caught. This analysis suggests, once again, that, in order to achieve optimal deterrence, our legal system should provide for less severe penalties for second-time offenders than for first-time offenders instead of, as it currently does, reserving the least severe penalties for the latter group.
Finally, Part VI takes up the question of what does drive the pervasive practice of escalating penalties based on offense history. And here I offer an admittedly speculative theory: the escalation of penalties for repeat offenses is necessary to maintain the internalization of the social norm that formally prohibited conduct is wrongful, and this internalization, in turn, greatly facilitates broad-based compliance with the positive law. If penalty escalation based on offense history is necessary for such norm internalization, and such internalization is by far the cheapest way of controlling generally harmful conduct, penalty escalation may be considered a desirable substitute for additional expenditures of public enforcement resources.
JEL Classification: K14
Date posted: February 10, 2000