Crime and Law Enforcement

1
Crime and Law Enforcement
Siena Seminar04/2005

• Nuno Garoupa
• Universidade Nova de Lisboa
• CEPR, London

2
OUTLINEOverview of the Economics of Law
Enforcement

• Introduction
• Background The Classical School The
  NeoClassical School.
• The Economics of Deterrence and Law Enforcement
• Basic Economic Model.
• Extensions of Basic Model.
• Other Goals of Law Enforcement.
• Empirical Work The Controversies.
• The General Structure of Law Enforcement
• The Choice of Private vs. Public Enforcement of
  the Law.
• Determinants of the Structure of Law Enforcement
  Criminal, Tort, and Administrative.
• Economic Aspects of Criminal Procedure.

3
INTRODUCTION
4
Background

• The Early Days
• Cesare Beccaria (1738-1794)
• Cesare Bonesana, Marchese di Beccaria
• Of Crimes and Punishment, 1764
• Jeremy Bentham (1748-1832)
• Introduction to the Principles of Morals and
  Legislation, 1789

5
Beccaria

• Fundamental Ideas
• There should be as little law as possible
• Criminal law should not simply uphold moral
  values for their own sake, but should furnish the
  requirements of society
• Criminal offenses should be clearly defined
• Punishment should be proportional to the harm
  done to society it should not exceed that which
  was necessary to ensure that the criminal would
  not re-offend
• Punishment should deter in a general sense
• There must be certainty of punishment and it
  should be imposed promptly
• Certain moderate punishment is easier to enforce
  and therefore is more effective than the mere
  possibility of a severe one
• Fines should dominate over imprisonment and death
  penalty (which he disliked)
• Corporal punishment is the appropriate way to
  deal with violent offenders.

6
Impact of Beccarias work

• Abolishment of death penalty in Tuscany and, for
  a while, in Austria.
• Declaration of Rights of Man in France.
• Revolutionary Code of 1791 the level of
  punishment was related to the precise nature of
  the offense to such an extent that the only
  function for the judge was the determination of
  guilt or innocence.
• American Declaration of Independence.

7
Impact in America

• We perceive... that the severity of our
  criminal law (that is, the old criminal law
  inherited from England) is an exotic plan, and
  not the native growth of Pennsylvania... as soon
  as the principles of Beccaria were disseminated,
  they found a soil that was prepared to received
  them.
• William Bradford, 1793, US Attorney-General

8
Bentham

• Fundamental Ideas
• Criminal law should be subject to the principle
  of the greatest happiness of the greatest
  number (utilitarism)
• Every human act should be first evaluated in
  terms of whether it will cause pleasure or pain
• To deter a crime, the amount of pain derived from
  the forbidden act should be greater than the
  amount of pleasure
• Harsh punishment should be constrained by the
  social contract, no-one could be taken to have
  agreed to the possibility of receiving
  excessively harsh punishment

9
Impact of Bentham

• Reports for a Criminal Code (1833-1848) in the
  UK
• Code Napoleon of 1810.

10
Neoclassical School

• Rossi (1787-1848) Garraud (1849-1930) Joly
  (1839-1925).
• Fundamental Ideas
• There are limitations to rational choice
• Punishment should fit the crime rather than the
  criminal
• People are free not to choose crime.

11
And Rational Choice Goes Away...

• Positivism... The predestined model
• from 1880s to 1960s
• Labelling Theories ... The victimized model
• from the 1960s on to today

12
... And Rational Theory makes a comeback

• The Modern Rational Theory
• James Q. Wilson, Thinking About Crime (1975)
• Clarke and Cornish, introduce limited rationality
  (1987)
• Cohen and Felson, Routine Activities Theory
  (1979)
• Hirschi, Social control theory (1969)
• Gottfredson and Hirschi, General theory of crime
  (1990)
• The Economic Theory
• Becker (1968, JPE)
• Stigler (1970, JPE)
• Ehrlich (1973, AER)
• Work by Polinsky and Shavell OPTIMAL LAW
  ENFORCEMENT

13
ECONOMICS OF ENFORCEMENT
14
BASIC MODEL

• Objective of law enforcement DETERRENCE.
• Why? Externality (social harm or social damage).
• How? Internalize externality.
• Market Approach to Law Enforcement
• Is there a market for offenses?
• Is a sanction really a price?
• Price approach (Becker, 1968 JPE)
• Pigou taxation approach (Cooter, 1982 Columbia
  LR)
• Policy instruments
• Sanction Fine
• Resources devoted to punishment Probability

15
BASIC MODEL

• Individuals compare
• Benefits
• Illegal Gain
• Other Gains (Psychological, Biological,)
• Costs
• Expected Punishment
• Social Costs Stigma
• Other Costs (Psychological)
• Decision to offend is the rational outcome of
  comparing costs and benefits
• There will be crime if Benefits gt Costs

16
NORMATIVE FRAMEWORK

• What are the payoffs?
• Criminal Benefits of crime Costs of crime
• Victim Harm from crime
• Government Benefits from punishment Enforcement
  Costs

17
NORMATIVE FRAMEWORK

• Utilitarian Social Welfare
• Benefits of Crime C Benefits from Punishment
  G Costs of Crime C Harm from Crime V
  Enforcement Costs G

18
NORMATIVE FRAMEWORK

• Should Illegal Gains be Considered?
• Social Contract
• Kaldor-Hicks Efficiency
• Pareto Conflict Theorem (Kaplow and Shavell, 2000
  JPE)

19
DETERRENCE WITH FINES

• Compliance is achieved if Benefit from Crime
  Cost of Crime
• Benefit Illegal Gain
• Cost of Crime Probability x Fine

20
DETERRENCE WITH FINES

• Compliance is Efficient if...
• Illegal Gain lt Harm
• Compliance is NOT Efficient if...
• Illegal Gain gt Harm
• Therefore, we should have...
• Probability x Fine Harm

21
THE MULTIPLIER PRINCIPLE

• FineHarm/Probability
• Harm 100

22
LIMITATIONS OF MULTIPLIER PRINCIPLE

• Resistance to Inflating Sanctions
• Punishment should fit the crime
• Difficulty in estimating accurately the
  probability of punishment
• Individuals are not risk neutral
• Does not say which policy is efficient

23
BECKERS FUNDAMENTAL RESULT

• Fines are costless transfers
• Resources devoted to punishment are socially
  costly
• High Fine Low Probability
• Fine Entire Wealth
• Probability should go to Zero

24
BASIC PROPERTIES OF LAW ENFORCEMENT

• Acts that have a benefit higher than the external
  cost they cause SHOULD NOT be deterred and SHOULD
  be punished.
• Acts that have a benefit lower than the external
  cost they cause SHOULD be deterred.

25
BASIC PROPERTIES OF LAW ENFORCEMENT

• Punishment should be based on harm to the victim
  and not on the gain to the criminal (Polinsky and
  Shavell, 1993 JLEO).
• A sanction based on the gain to the criminal
  would deter by removing the illegal gain.
  However, if the gain is above the level of harm,
  the deterrence of these acts would be inefficient.

26
OPTIMAL LAW ENFORCEMENT

• The Multiplier Principle is not Efficient because
  it does not care about enforcement costs.
• Efficient probability and sanction should
  maximize social welfare
• Fine equals entire wealth (Becker)
• Probability equals
• Harm/Fine Marginal Cost of Enforcement
• Expected Fine is less than Harm
• Some under-deterrence is efficient (Polinsky and
  Shavell)
• Complete deterrence is not efficient (Polinsky
  and Shavell)

27
OPTIMAL LAW ENFORCEMENT

• Efficient Deterrence is NOT
• Complete Deterrence.
• achieved by the Multiplier Principle.
• Efficient Deterrence is
• maximization of Social Welfare.
• about criminals being able to compensate
  victims (potential).

28
DETERRENCE WITH NONMONETARY SANCTIONS

• Nonmonetary sanctions are different because
• They are socially costly to impose (NOT costless)
• They create disutility (NOT transfer)

29
DETERRENCE WITH NONMONETARY SANCTIONS

• Optimal Nonmonetary Sanctions (Polinsky and
  Shavell, 1984 JPubE)
• Should NOT be maximal
• Should be used infrequently
• Should be implemented once fines are exhausted
• Less wealthy people
• Should only be applied for more harmful acts

30
DETERRENCE WITH NONMONETARY SANCTIONS

• Why NOT?
• Wealth is private information imprisonment as a
  device for information revelation (Levitt, 1996
  IRLE)
• Disutility of imprisonment (Polinsky and Shavell,
  1998 JLS)
• Risk neutrality with respect to fines
• Risk-aversion with respect to imprisonment
• Corruption or other means of punishment avoidance
  (Garoupa and Klerman, 2004 IRLE)

31
LAW ENFORCEMENT LITERATURE
32
LAW ENFORCEMENT LITERATURE(since 1979)

1. Marginal Deterrence
2. Multiple Offenses
3. Attempts
4. Repeat Offenders
5. Deterrence with a Reduction in Enforcement Costs
6. Plea-Bargaining
7. Self-Reporting
8. Corruption
9. Avoidance activities including defense
   expenditure
10. Legal Aid
11. Corporate Business Crime
12. Principal Agent Theory
13. Should the Management or the Shareholders be
    Punished?
14. Deterrence vs. Cover Up

• Victims
• Precaution
• Should we have comparative negligence rules in
  criminal law?
• Compensation
• Hate Crimes
• Enforcement Errors
• Deterrence
• Miscarriage of justice
• Systematic or Random?
• Incentives for Enforcement Agents
• Monitoring versus Investigation
• What do Prosecutors maximize?
• What do Judges maximize?

33
MARGINAL DETERRENCE

• If sanctions are maximal for all acts, the
  marginal expected cost for a second crime is
  zero... It will not be deterred!
• Suppose there are two possible criminal acts
• Objective 1 Deter act A and act B.
• Objective 2 If act A has been committed, deter
  act B.
• Objective 3 If act B has been committed, deter
  act A.

34
MARGINAL DETERRENCE

• If we apply maximal fines objectives 2 and 3
  cannot be achieved!!
• Therefore, in order to satisfy objective 2 and 3,
  we need nonmaximal fines.
• Objective 1 is deterrence in the general sense
  whereas objectives 2 and 3 are marginal
  deterrence.

35
MARGINAL DETERRENCE

• Implications (Stigler and others)
• ... More harmful acts have higher fines, but less
  harmful act should have lower fines...
• ... The fine for act A should increase with the
  level of harm generated by act A and decrease
  with the level of harm generated by act B...
• ... There is a tension between marginal
  deterrence objectives and general deterrence
  objectives...

36
OTHER GOALS OF ENFORCEMENT

• Incapacitation
• Rehabilitation
• Retribution
• Preference Shaping
• Stigma
• Social Norms

37
OTHER GOALS OF ENFORCEMENT

• Incapacitation
• Benefit of incapacitation is the harm s/he would
  commit otherwise
• Imprisonment is more effective than fines
• However, in some particular contexts, other
  sanctions can be equally effective
• losing driver license, suspending professional
  rights,
• Probability of detection and punishment is
  irrelevant.

38
OTHER GOALS OF ENFORCEMENT

• Incapacitation
• Deterrence is about dissuading an individual from
  committing a criminal act
• Incapacitation is about preventing an individual
  from engaging in a criminal act and remove
  parties from positions in which they could cause
  harm
• What an individual knows is irrelevant for
  incapacitation.

39
OTHER GOALS OF ENFORCEMENT

• Incapacitation
• The marginal benefit from incapacitation should
  equal the marginal cost
• Only those people who are highly prone to harm
  society should be incapacitated.
• Empirical question can we distinguish
  incapacitation from deterrence?
• See Kessler and Levitt on using sentencing
  enhancements to distinguish INC and DET.

40
OTHER GOALS OF ENFORCEMENT

• Rehabilitation
• Marginal benefit from changing criminogenic
  preferences should equal the marginal cost of
  rehabilitation programs.
• Empirical literature is not exciting about
  rehabilitation
• Retribution
• Sanctions will be higher than otherwise

41
OTHER GOALS OF ENFORCEMENT

• Preference Shaping
• Stigma
• Deterrence. (Rasmusen, 1996 JLE)
• Intertemporal inconsistency entry vs. exit
  barriers. (Funk, EER 2005)
• Social Norms
• Norms management
• Relationship between extralegal and legal norms
• Criminal law as a signal
• Criminal sanctions as part of optimal morality
  rules
• Expressive Law and Economics
• Criminal Law as a focal point

42
EMPIRICAL ANALYSIS
43
EMPIRICAL ANALYSIS

• The decline of crime in the 1990s in the US
• The magnitude
• The broad range
• The universality
• The persistent, continuous nature of the crime
  decline
• Unexpected drop
• The controversies
• Death penalty
• Guns
• Legal abortion
• Effects of sentencing guidelines on crime rates
• Affirmative action on policing
• Racial bias on arrests
• Low female criminality
• Effects of juvenile sentencing rules on juvenile
  delinquency

44
(Levitt, 2004)
45
(Levitt, 2004)
US 1995-1999 EUROPEAN UNION 1995-1999
HOMICIDE RATES -28 -4
VIOLENT CRIME -20 11
BURGLARY -19 -14
MOTOR VEHICLE -22 7
46
(Levitt, 2004)
47
CAPITAL PUNISHMENT

• DEBATE
• Ehrlich (1973, 1975) seven murders per
  execution.
• A number of critics demonstrated the sensitivity
  of Ehrlichs findings to minor changes in
  specification.
• Similar debate in Britain (Wolpin, Pyle,
  Cameroon).
• Leamer and McManus in the late 1980s argue that
  the evidence of deterrence is essentially a
  product of the researchers prior beliefs.
• Ehrlich and Liu (1999) focus on 1940 and 1950,
  there is a deterrent effect.
• A series of more recent studies that incorporate
  data from the 1990s find yet again a deterrent
  effect. But others do not. Measurement problems
  and econometric specification are at the heart of
  the debate.
• Levitt (2004) believes if there is any effect,
  it is small.

48
CAPITAL PUNISHMENT

• Levitts argument against a substancial deterrent
  effect of capital punishment
• Rarity of executions and long delays in doing
  so...the probability is still below 1 in 200 (2
  annual execution rate for those on death row,
  just twice the death rate from accidents and
  violence among all American men).
• Even if Ehrlichs optimistic empirical estimate
  would only eliminate 364 homicides per year, less
  than 1/20 of the observed decline.
• Notice the question of deterrence is
  effectiveness and not efficiency of dealth
  penalty.

49
CONCEALED WEAPONS LAWS

• Concealed Weapons (Shall Issue) Laws
• Argument in face-to-face contact and for
  particular crimes, armed victims raise cost faced
  by a potential offender.
• Under Shall Issue Laws
• A law that allows a citizen to carry a concealed
  handgun if h/she can demonstrate a need to a
  governmental official is a discretionary or may
  issue law
• A shall issue law is designated to eliminate
  discretion on the part of officials because
  permits have to be issued unless specific and
  easily verifiable factors say otherwise.
• Permit cannot be issued for
• Individuals below 18 or 21
• Those who have a criminal record or a history of
  mental illness.

50
CONCEALED WEAPONS LAWS

• DEBATE over the enactment of Shall Issue Laws
  with respect to Gun Concealed on Crime Rates
• Lott and Mustard (1996, JLS) , Lott (1997, JLS
  2000)? NEGATIVE
• Black and Naggin (1998, JLS), Duggan (2001, JLS),
  Ayres and Donohue (2001, ALER 2003, Stanford LR)
  ? NO, SOME POSITIVE

51
ABORTION AND CRIME

• The Legalization of Abortion (Roe v. Wade)
• Theory
• Unwanted children are at greater risk for crime
• Legalized abortion leads to a reduction in the
  number of unwanted births.
• Evidence by Donohue and Levitt (2001, QJE)
• The five states (NY,W, Alaska, Hawaii and
  California after SC of California ruling of 1969)
  that allowed abortion in 1970 experience declines
  in crime earlier than the rest of US.
• States with high and low abortion rates in the
  1970s experienced similar crime trends for
  decades until the first cohort exposed to
  legalized abortion reached the high-crime ages
  around 1990. At that point, the high abortion
  states saw dramatic declines in crime relative to
  low abortion states over the next decade.
• Panel data estimates confirm the strong
  relationship between lagged abortion and crime.

52
ABORTION AND CRIME

• Debate
• Lott and Whitley (2003) criticize
• Abortion may prevent the birth of "unwanted"
  children, who would have relatively small
  investments in human capital and a higher
  probability of crime.
• On the other hand, some research suggests that
  legalizing abortion increases out-of-wedlock
  births and single parent families, which implies
  the opposite impact on investments in human
  capital and thus crime.
• The question is what is the net impact?
• They find evidence that legalizing abortion
  increased murder rates by around about 0.5 to 7
  percent.
• Previous estimates are shown to suffer from not
  directly linking the cohorts who are committing
  crime with whether they had been born before or
  after abortion was legal.
• Though abortion was indeed legalized in New York,
  California, Alaska, Hawaii, and Washington prior
  to the 1973 Roe vs. Wade decision, there were
  also a sizeable number of abortions being
  performed in other states where abortion was
  legal for the life or "health" of the mother
  before 1973. Indeed, several of these states had
  abortion rates as high or higher than those
  states where abortion was legalized.
• Joyce (2003)
• Demographers have concluded that most legal
  abortions in the early 1970's replaced illegal
  abortions. Since no one has data on illegal
  abortion rates, the results in Donohue and Levitt
  (2001) may be spurious.

53
STRUCTURE OF LAW ENFORCEMENT
54
PRIVATE vs. PUBLIC ENFORCEMENT

• Theory
• Becker and Stigler, 1974 JLS
• Landes and Posner, 1975 JLS
• David Friedman, 1984 JLS
• Enforcement Problems
• Under-enforcement Polinsky, 1980 JLS
• Error Garoupa, 1997 IRLE
• Rent-seeking Garoupa and Klerman, 2002 ALER
• Historical Cases
• Roman Law
• Posner 1981, Parisi 2002 ALER, Garoupa and
  Gomez 2004
• England vs. France
• Friedman 1996 UChicago R., Glaeser and Shleifer
  2002 QJE
• Medieval (pre-Norwegian) Iceland
• Friedman 1979 JLS

55
THEORY

• Becker and Stigler, 1974 JLS
• A system where the enforcer receives the fine
  paid by the offender eliminates corruption
• We need private enforcement to get efficient
  deterrence.

56
THEORY

• Landes and Posner, 1975 JLS
• A fine is the price for criminal market and price
  for the enforcement activities it cannot be set
  at a level which will optimize both criminal and
  enforcement activities.
• Private enforcers will not internalize the
  positive externality from raising the
  probability, hence crime rates will be higher.

57
THEORY

• David Friedman, 1984 JLS
• Government enforcement is also subject to
  inefficiencies, therefore the question is which
  system is superior ? Empirical answer
• Enforcement contracts are prior to detection, and
  therefore the deterrent effect of catching
  criminals can be internalized by advance
  contracting as in any other market.
• Allocation of the right to catch criminals
  private property of the victim who should be able
  to sell it to the highest bidder.

58
THEORY

• Private Enforcement Problems
• Under-enforcement Polinsky, 1980 JLS
• Monopoly
• Competitive Market
• Error Garoupa, 1997 IRLE
• More errors than efficient
• Sanction enforcer when accused is found not
  guilty ? pay for performance
• Make sure performance measure cannot be
  manipulated evidence,
• Rent-seeking Garoupa and Klerman, 2002 ALER
• Enforcers and Government Bureaucrats compete for
  rents.

59
STRUCTURE OF LAW ENFORCEMENT

• Determinants of the Structure of Law Enforcement.
• Why Criminal Law?
• Criminal and Tort.
• Criminal, Tort and Administrative.

60
GENERAL STRUCTURE OF LAW ENFORCEMENT (from
Shavell, 2004)
61
DETERMINANTS OF STRUCTURE OF THE LAW (from
Shavell, 2004)

• Determinants of Optimal Stage of Intervention
• Magnitude of Possible Sanctions for Deterrence
• Prevention
• Information about Acts
• When is available
• To Whom is available State Parties
• Enforcement Costs

62
DETERMINANTS OF STRUCTURE OF THE LAW (from
Shavell, 2004)

• Determinants of Optimal Form of Sanctions
• Level of Wealth
• Illegal Gain
• Harm
• Resources Devoted to Detection and Punishment
• Enforcement Costs
• Distribution of Costs

63
DETERMINANTS OF STRUCTURE OF THE LAW (from
Shavell, 2004)

• Determinants of Public vs. Private Enforcement
• Information is primarily private
• Reporting
• Compensation, Retribution
• Effort must be Expended to Identify Injurers
• Information systems may constitute natural
  monopolies

64
CRIMINAL VS. TORT

• Posners Typology of Crime (1985, CLR)
• Criminal Law deters pure coercive transfers of
  wealth, pure implying it is not an accident of
  productive activities.
• Crimes are acts that aim at market bypassing
• Acquisitive crimes bypass explicit markets
• Crimes of passion bypass implicit markets
• Allowing coercion would create incentives for
  potential victims to spend heavily on
  self-protection.

65
CRIMINAL VS. TORT

• Problems
• What is the difference between intentional torts
  and crime in a market bypass approach?
• Why are some conducts crimes at common law
  (counterfeiting) and others made criminal by
  statute (tax evasion or price-fixing)?
• Some crimes are voluntary exchanges,
  prostitution, gambling
• Effect on third parties.

66
CRIMINAL VS. TORT

• Criminal law is designed primarily for when tort
  law does not work
• For the poor
• The affluent are kept in line by tort law
• Same conclusion as Critical Criminology but
• They think it is wrong!
• Posner (CLR, 1985) explicitly thinks it is ok!!

67
CRIMINAL VS. TORT VS. ADMINISTRATIVE

• Economic Explanations for Crime, Tort and
  Administrative overlap
• (Rubinfeld and Sappington, 1987 RAND Garoupa
  and Gomez, 2004 ALER Pistor and Xu, 2002)
• Regulatory Enforcement is cheaper but less
  effective
• Forces production of information by victims and
  enforcers
• Generates competitive enforcement
• Duplication of Costs
• Deters Corruption
• Avoids Error
• Incompleteness of the law

68
ECONOMICS OF CRIMINAL LAW
69
CRIMINAL LAW(Posner, CLR 1985)

• Criminal Intent
• Distinguish intent from awareness.
• Unless the criminal defendant confesses, his
  state of mind has to be inferred from actions
• Deterrence theory requires premeditation
• Behavioral Approach to Crime (Jolls, Sunstein and
  Thaler, 1998 Stanfort LR, but see criticism by
  Arlen, 1998 Vanderbilt LR and Garoupa, 2003 EJLE)

70
CRIMINAL LAW(Posner, CLR 1985)

• Defense of Insanity
• Cannot be deterred
• But what about incapacitation?

71
CRIMINAL LAW(Posner, CLR 1985)

• Defense of Necessity
• No question of incapacitation,
• Lowers transaction costs
• Widespread use could bypass market transactions.
• Example Dudley and Stephens (1884).
• One of them was near dead in any case, and that
  killing and eating save the other three men.

72
CRIMINAL PROCEDURE AS A MARKET SYSTEM(Easterbrook
, JLS 1983)

• Ideal Criminal Procedure Market System
• Optimal pricing internalize social harm
• Efficient trade-off between fines and severity
• Optimal allocation of resources given constrained
  budgets
• Price set by negotiations
• Feedback effect

73
CRIMINAL PROCEDURE AS A MARKET SYSTEM(Easterbrook
, JLS 1983)

• Criminal Procedure Market System
• Prosecutorial Discretion
• European compulsory prosecution model is
  inevitably ineffective
• Rules produce behavior to escape clauses
  outcomes are arbitrary and unexpected.
• Market Failure objections
• Prosecutor does not seek to maximize social
  welfare
• Agency costs.
• Results are inequitable.
• The Role of ex post equality in defining fair
  treatment

74
CRIMINAL PROCEDURE AS A MARKET SYSTEM(Easterbrook
, JLS 1983)

• Criminal Procedure Market System
• Efficient Prosecution
• Decision not to prosecute
• Selective prosecution
• Selection of charge
• Upping the Ante.
• Domination of the Grand Jury
• Limit private prosecution
• Discovery

75
CRIMINAL PROCEDURE AS A MARKET SYSTEM(Easterbrook
, JLS 1983)

• Criminal Procedure Market System
• Plea-Bargaining
• Price-establishing function at low cost
• Market failure arguments
• Defendants lawyers will use it to undermine the
  interests of the accused.
• Discrimination against poor defendants.
• No voluntary sales by defendants of their rights.
• Reward for pleading guilty or a penalty for
  insisting on trial?

76
CRIMINAL PROCEDURE AS A MARKET SYSTEM(Easterbrook
, JLS 1983)

• Criminal Procedure Market System
• Efficient rules of plea-bargaining
• Plea-Bargains are Binding
• Written contract
• Unconscionable Pleas can be Binding
• Broken Bargains
• Deal is off.
• Involvement of the Judge in Bargaining
• Should be limited because has less access to
  evidence than prosecutor.

77
CRIMINAL PROCEDURE AS A MARKET SYSTEM(Easterbrook
, JLS 1983)

• Criminal Procedure Market System
• Sentencing Discretion
• Price discrimination
• Reduction of information costs
• Market Failure Objections
• Inequitable sentencing
• Ex ante expected penalties are the same
• Elimination of discretion does not reduce ex post
  inequality
• Why should criminals have a moral claim to equal
  treatment when the costs fall on the law abiding?
• Notice the recent debate over sentencing
  guidelines.

78
JURISDICTIONAL COMPETITION IN CRIMINAL JUSTICE

• Competitive federalism in Criminal Justice.
• Europe (Schengen) Garoupa, 1997 IRLE
• US Doron, 2004 Michigan LR
• Problems
• Displacing crime
• Displacing criminals.
• Regulating the Market for Criminal Justice
• Race to Bottom displacement.
• Race to Top raise probability of detection.
• Local solutions vs. central planners (federal
  criminal law).