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Optimal deterrence with legal defense expenditure

Gravelle, H. and Garoupa, N. (2002) Optimal deterrence with legal defense expenditure. Economic Inquiry, 40 (3). pp. 366-379. ISSN 0095-2583

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Abstract

Legal defence expenditure by those accused of a crime reduces their probability of punishment (whether innocent and guilty). We show that there could be more or less crime in a system which permits such expenditure. Because accused may choose a level of defence expenditure which bankrupts them if found guilty, deterrence can decrease when the fine is increased. The unregulated expenditure of innocent and guilty defendants is inefficient. We show that the optimal fine will never bankrupt the dishonest accused but that the honest accused can be bankrupt or left with positive wealth if convicted. We examine policies to regulate defence expenditure including a tax financed public defender system, a tax on legal defence and compensation for acquitted accused.

Item Type: Article
Depositing User: York RAE Import
Date Deposited: 05 Jun 2009 14:11
Last Modified: 05 Jun 2009 14:11
Published Version: http://dx.doi.org/10.1093/ei/40.3.366
Status: Published
Publisher: Blackwell Publishing
Identification Number: 10.1093/ei/40.3.366
URI: http://eprints.whiterose.ac.uk/id/eprint/5990

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