NCJ Number
84474
Journal
Journal of Criminal Law and Criminology Volume: 73 Issue: 2 Dated: (Summer 1982) Pages: 582-603
Date Published
1982
Length
20 pages
Annotation
The article uses economic efficiency as a gauge to analyze the effectiveness of imposing criminal sanctions to deter socially undesirable conduct.
Abstract
Different classes of legal rules are examined to determine whether a private individual or the public (i.e., the government) should enforce each class of rules and, if the public should enforce a class, whether criminal or civil sanctions against violators maximizes economic efficiency and deterrence effectiveness. The article concludes that for the class of corporate legal rules with a probability close to one (or unity) that the victims will detect a breach, the victims should privately enforce the rules. Where the probability that the victims will detect a breach is not close to unity, public enforcement of these legal rules with civil sanctions will maximize economic efficiency. Civil sanctions are preferable for corporate breaches of all legal rules because criminal sanctions increase the costs of enforcing legal rules without producing a concomitant benefit to society and thus are less efficient. Regardless of whether a legal rule is one that should be privately or publicly enforced, the expected cost to a corporate offender from inflicting social damage should equal the social damage that the corporate offense imposes. When an offender's expected cost from committing an offense equals the offense's social cost, the social liability system encourages valueor welfare-maximizing corporate behavior, maximizing society's net wealth. A total of 97 footnotes are provided. (Author summary modified)