The Economic Theory of Public Enforcement of Law

55 Pages Posted: 26 Jun 2000 Last revised: 12 Oct 2010

See all articles by A. Mitchell Polinsky

A. Mitchell Polinsky

Stanford Law School; National Bureau of Economic Research (NBER)

Steven Shavell

Harvard Law School; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1999

Abstract

This article surveys the theory of the public enforcement of law -- the use of public agents (inspectors, tax auditors, police, prosecutors) to detect and to sanction violators of legal rules. We first present the basic elements of the theory, focusing on the probability of imposition of sanctions, the magnitude and form of sanctions, and the rule of liability. We then examine a variety of extensions of the central theory, concerning accidental harms, costs of imposing fines, errors, general enforcement, marginal deterrence, the principal-agent relationship, settlements, self-reporting, repeat offenders, imperfect knowledge about the probability and magnitude of fines, and incapacitation.

Suggested Citation

Polinsky, A. Mitchell and Shavell, Steven, The Economic Theory of Public Enforcement of Law (March 1999). NBER Working Paper No. w6993. Available at SSRN: https://ssrn.com/abstract=226410

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Steven Shavell

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