This PDF is a selection from an out-of-print volume from the National
Bureau of Economic Research
Volume Title: Essays in the Economics of Crime and Punishment
Volume Author/Editor: Gary S. Becker and William M. Landes, eds.
Volume Publisher: NBER
Volume ISBN: 0-87014-263-1
Volume URL: http://www.nber.org/books/beck74-1
Publication Date: 1974
Chapter Title: The Optimum Enforcement of Laws
Chapter Author: George J. Stigler
Chapter URL: http://www.nber.org/chapters/c3626
Chapter pages in book: (p. 55 - 67)
APPROACH
nt Legislation on the
[issertation, Columbia
The
Optimum Enforcement
York:
Macmillan Co.,
nts
for
Inventions."
of
Laws
Lou'. Vol. II. 2d ed.
uinistration of Justice.
George
J. Stigler
ton: U.S. Government
University of Chicago and National Bureau of Economic Research
on: U.S. Government
Ion: U.S. Government
Lk
Force
ts.") Washington: U.S.
rs A dnuinisirationfroin
," in
President's Corn-
All prescriptions of behavior for individuals require enforcement.
of Justice. Organized
Usually the obligation to behave in a prescribed way is entered into
Government Printing
voluntarily by explicit or implicit contract. For example, I promise to
teach certain classes with designated frequency and to discuss matters
Back Up the Police."
which I, and possibly others, believe are relevant to the course titles. By
negotiation, and in the event of its failure, by legal action, I and my em-
alysis." MA. thesis,
ployer seek to enforce the contract of employment against large depar-
tures from the promised behavior. Performance of some kinds of behavior
Case of Electncity."
is difficult or impossible to enforce—such as promises to be creative,
noble, or steadfast in crisis—and as a result such contractual promises
conomy 72 (February
.
are
either not made or enforced only when there is an uncontroversially
Journa! of Laui'
and
flagrant violation. The influence upon contract, and upon economic
organization generally, of the costs of enforcing various kinds of contracts
adelphia: J. B. Lippin-
has received virtually no study by economists, despite its immense poten-
tial explanatory power.
When the prescribed behavior is fixed unilaterally rather than by indi-
vidual agreement, we have the regulation or law, and enforcement of
these unilateral rules is the subject of the present essay. Departures of
actual from prescribed behavior are crimes or violations, although one
could wish for a less formidable description than "criminal" to describe
56
THE OPTIMUM ENFORCEMENT OF LAWS
many of the trifling offenses or the offenses against unjust laws. My
primary purpose is to construct a theory of rational enforcement, a theory
which owes much to Gary Becker's major article on the subject (1968). in
the conclusion the problem of explanation, as distinguished from prescrip-
tion, will be commented upon.
I. THE GOAL OF ENFORCEMENT
The goal of enforcement, let us assume, is to achieve that degree of com-
pliance with the rule of prescribed (or proscribed) behavior that the
society believes it can afford. There is one decisive reason why the so-
ciety must forego "complete" enforcement of the rule: enforcement is
costly.
The extent of enforcement of laws depends upon the amount of re-
sources devoted to the task. With enough policemen, almost every speed-
ing automobile could be identified. The success of tenacious pursuit of
the guilty in celebrated crimes (such as the great English train robbery
and the assassination of Martin King) suggests that few crimes of sane
men could escape detection. We could make certain that crime does not
pay by paying enough to apprehend most criminals. Such a level of en-
forcement would of course he enormously expensive, and only in crimes
of enormous importance will such expenditures be approached. The
society will normally give to the enforcement agencies a budget which
dictates a much lower level of enforcement.
The cost limitation upon the enforcement of laws would prevent the
society from forestalling, detecting, and punishing all offenders, but it
would appear that punishments which would be meted out to the guilty
could often be increased without using additional resources. The offender
is deterred by the expected punishment, which is (as a first approxima-
tion) the probability of punishment times the punishment—$ 100 if the
probability of conviction is 1/10 and the fine $1,000. Hence, increasing
the punishment would seem always to increase the deterrence. Capital
punishment is cheaper than long term imprisonment; and seizure of all
the offender's property may not be much more expensive than collecting
a more moderate fine.
To escape from this conclusion, Becker introduces as a different limi-
tation on punishment the "social value of the gain to offenders" from the
offense. The determination of this social value is not explained, and one
is entitled to doubt its usefulness as an explanatory concept: what evi-
dence is there that society sets a positive value upon the utility derived
from a murder, rape, or arson? In fact the society has branded the utility
derived from such act
gain to the offender i:
seem too infrequent,
upon the size of puni
Instead we take
ment, which arises o
doubt true that the
pected netutility to
given offense. But
of life, and the margi
small or even
sault and for a murdc
thief has his hand cu
$5,000. Marginal c
marginal deterrence
otherwise appropriat
One special asp
need to avoid overe
apprehend most guil
and frequent convic
system, there will in I
parties, and these ml
and loss of confidei
defense of innocent p
are part of the costs
viction of innocent p
marginal deterrence I
The significance
that will be used to
the gravity of the ofi
manifest itself only i
more tenaciously th
I. For example, the I
warms
the neighboring ho
2. Becker writes the I
where Y is the money val
f the fine. (The income,
single offense Y must be
spect to
Y, =
tive for all
}'. Of course
crime.
LAWS
GEORGE J. STIGLER
57
inst unjust laws. My
enforcement, a theory
the subject (1968). In
from prescrip-
'e that degree of corn-
behavior that the
ie reason why the so-
rule: enforcement is
the amount of re-
!n, almost every speed-
tenacious pursuit of
English train robbery
few crimes of sane
that crime does not
Such a level of en-
ye, and only in crimes
be approached. The
ncies a budget which
ws would prevent the
all offenders, but it
eted out to the guilty
sources. The offender
(as a first approxima-
ishment—$ 100 if the
)O. Hence, increasing
e deterrence. Capital
nt; and seizure of all
ensive than collecting
ces as a different limi-
o offenders" from the
at explained, and one
y concept: what evi-
on the utility derived
as branded the utility
derived from such activities as illicit. It may be that in a few offenses some
gain to the offender is viewed as a gain to society,' but such social gains
seem too infrequent, small, and capricious to put an effective limitation
upon the size of punishments.
Instead we take account of another source of limitation of punish-
ment, which arises out of the nature of the supply of offenses. It is no
doubt true that the larger the punishment, the smaller will be the ex-
pected net utility to the prospective offender from the commission of a
given offense. But marginal decisions are made here as in the remainder
of life, and the marginal deterrence of heavy punishments could be very
small or even negative. If the offender will be executed for a minor as-
sault and for a murder, there is no marginal deterrence to murder. if the
thief has his hand cut off for taking five dollars, he had just as well take
$5,000. Marginal costs are necessary to marginal deterrence.2 The
marginal deterrence to committing small crimes is also distorted if an
otherwise appropriate schedule of penalties is doubled or halved.
One special aspect of this cost limitation upon enforcement is the
need to avoid overenforcement. The enforcement agency could easily
apprehend most guilty people if we placed no limits upon the charging
and frequent conviction of innocent people. in any real enforcement
system, there will in fact be conviction and punishment of some innocent
parties, and these miscarriages of justice impose costs of both resources
and loss of confidence in the enforcement machinery. The costs of
defense of innocent parties, whether borne by themselves or by the state,
are part of the costs of enforcement from the social viewpoint. The con-
viction of innocent persons encourages the crime because it reduces the
marginal deterrence to its commission.
The significance of an offense to society —
the quantity of resources
that will be used to "prevent" the offense—will in general increase with
the gravity of the offense. The increase in resources, however, will not
manifest itself only in an increase in punishments. The state will pursue
more tenaciously the offender who commits a larger crime (or repeti-
1. For example, the thief reduces the welfare expenditures of the state, or the arsonist
warms the neighboring houses.
2. Becker writes the expected utility from an offense as EU=pU(Y—f)+(l
—p)U(Y),
where
Y is the money value of the gain, p the probability of detection and conviction, and
f the fine. (The income, Y, and fine,f, must be interpreted as average annual flows; for a
single offense Y must be less than f.) If
this expression is differentiated partially with re-
spect
to
Y,
—p)U'(Y)
U'(Y)—pfU'(Y), which
is
posi-
tive for all Y.
Of
course p and f
will
increase with Y to
prevent this incitement to larger
crime.
58
THE OPTIMUM ENFORCEMENT OF LAWS
tive crimes) and thus increase also the probability of apprehending him.
There is a division of labor between the state and the citizen in the
prevention of virtually every offense. The owner of large properties is
required to do much of his direct policing: there are surely more watch-
men and guards than policemen in a typical city. The larger accumula-
tions of wealth, moreover, are to be guarded by the owner through devices
such as nonnegotiability and custody of funds by specialists. Accordingly,
the pub/ic
punishments
for crimes against property do not increase in
proportion to the value of the property. In the protection of people, as
distinguished from their property, the individual is required to protect
himself from minor offenses or at least to detect their occurrence and
assume a large part of the burden of prosecution (for example, shop-
lifting, insults, simple trespass), but he is allowed less discretion in prose-
cution for major assaults.
The relationship of duration and nature of penalties to age and sex of
offender, frequency of previous offenses, and so forth is also explicable
in terms of cost of enforcement. The first-time offender may have com-
mitted the offense almost accidentally and (given any punishment) with
negligible probability of repetition, so heavy penalties (which have
substantial costs to the state) are unnecessary. The probability of a rep-
etition of an offense by a seasoned offender is also zero during his
imprisonment, so the probability of repetition of an offense is relevant
to the penalty also in his case.
Indeed, the problem of determining the efficient penalty may be
viewed as one in statistical inference: to estimate the individual's average,
durable propensity to offend (the population value) on the basis of a
sample of his observed behavior and how this propensity responds to
changes in penalties. As in other sequential sampling problems, one can
estimate this propensity more accurately, the longer the individual's
behavior is observed.
The society will be more concerned (because each individual is more
concerned) with major than minor offenses in the foUowing sense: there
is increasing marginal disutility of offenses, so a theft of $1,000 is more
than twice as harmful as a theft of $500. In the area of offenses to prop-
erty, this result is implied by diminishing marginal utility of income. In
the area of offenses to persons, it is more difficult to measure damage in
any direct way, but a similar rule probably holds.
So much for prevention and punishment; let us turn to the offenses.
II. THE SUPPLY
The commission of ol
act of consumption.
speeding in an autorr
rival (when the girl
i
by theft, smuggling,
realm of offenses to p
and we may recall A
crime:
The affluence of the nc
driven by want, and prc
the shelter of the civil r
is acquired by the
tions, can sleep a singi
known enemies, whom
from whose injustice h
magistrate continually
extensive property, th
government. Where the
of two or three days a
p. 670).
The professiona
of occupational choi
expected returns an'
difference with the i
legitimate activities.
correspond to the c
injuries to a
of apprehen
cupations have only
The details of o'
from those encounte
the locality of maxir
man, move from
ar
in
periods of(involui
can be expected to