The Economic Theory of Public Enforcement of Law

Stanford Law School, John M. Olin Program in Law and Economics, Working Paper No. 159

54 Pages Posted: 30 May 1998

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: May 1998

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.

JEL Classification: K42

Suggested Citation

Polinsky, A. Mitchell and Shavell, Steven, The Economic Theory of Public Enforcement of Law (May 1998). Stanford Law School, John M. Olin Program in Law and Economics, Working Paper No. 159. Available at SSRN: https://ssrn.com/abstract=93709 or http://dx.doi.org/10.2139/ssrn.93709

A. Mitchell Polinsky (Contact Author)

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Steven Shavell

Harvard Law School ( email )

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