NCPA - National Center for Policy Analysis

Deterring Crime Through Fines

September 22, 2003

The most efficient law enforcement system is one in which the deterrence is achieved as cheaply as possible, says A. Mitchell Polinsky.

To achieve this, the state must decide how long to imprison criminals and how much to spend on catching them. Better law enforcement, Polinsky says, requires more money to increase the probability that criminals are caught. Likewise, longer jail sentences also require more money.

As a result, the officials charged with allocating resources most efficiently must consider how fast an individual's "disutility" from a prison sentence increases with the sentence length.

  • If a criminal is assumed to hate each year spent in jail equally, the best law enforcement strategy involves relatively long sentences and low rates of detection of criminals, because the lowered costs of detection will compensate for higher imprisonment costs.
  • However, if it is assumed that the first few years of prison are the worst for the prisoner, then the best strategy would be to use shorter sentences and higher levels of detection -- lower imprisonment costs will offset higher law enforcement costs.

Furthermore, says Polinsky, fines are a less expensive way for society to sanction nonviolent criminals because the state doesn't have to spend the money to house those offenders (or a fine can reduce the length and thus the cost of a prison sentence). Heavy fines should be used in conjunction with prison terms to deter the most criminals possible.

Source: A. Mitchell Polinsky, "Law Enforcement Using Imprisonment," Stanford Law and Economics Olin Working Paper No. 259, May 2003, Stanford Law School, in An Introduction to Law and Economics (Third Edition, forthcoming 2003).

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