The Market for Criminal Justice: Federalism, Crime Control, and Jurisdictional Competition

Part I introduces the concepts of jurisdictional competition and crime displacement and argues that, as a positive matter, a decentralized criminal justice system may create a competitive process among the different units composing it, in which each such unit attempts to divert crime to neighboring communities. Part II then turns to evaluate the normative aspects of jurisdictional competition in the area of criminal justice. In this context I will show that competition can have both advantages and disadvantages. On one hand, the forces of competition might drive jurisdictions to fight crime efficiently, since any jurisdiction that functions inefficiently will suffer from a rise in its crime rate as a result of crime displacement. On the other hand, jurisdictions might face a collective-action problem in which they are spending increasingly high resources on their criminal justice system simply to deflect crime to their neighbors. In such a case, every jurisdiction \u27s interests would be served if jurisdictions could commit themselves not to compete in the area of criminal justice. The second half of Part II examines more closely the problem of inefficient competition in the realm of criminal justice, and explores different ways to deal with these inefficiencies. Finally, I offer concluding remarks as well as suggestions for future research

Convicting With Reasonable Doubt: An Evidentiary Theory of Criminal Law

This Article presents an evidentiary theory of substantive criminal law according to which sanctions are distributed in proportion to the strength of the evidence mounted against the defendant. It highlights the potential advantages associated with grading penalties in proportion to the probability of wrongdoing and situates this claim within both consequentialist and deontological theories of punishment. Building on this analysis, the Article reviews the doctrinal tools used to achieve the goal of evidentiary grading of sanctions and shows that key factors in criminal law are geared towards dealing with evidentiary uncertainty. Finally, the Article explores the underlying logic of the evidentiary structure of criminal law and argues that this structure can be justified on psychological, economic, and expressive grounds

Decentralizing Crime Control: The Political Economy Perspective

In an article recently published on the pages of this Law Review, The Market for Criminal Justice: Federalism, Crime Control, and Jurisdictional Competition ( The Market ), I put forward a theory of crime control in a decentralized government. Specifically, I made three distinct claims. First, criminal justice policies affect the geographic decision of criminals as to where to commit their crimes. Other things being equal, criminal activity will tend to shift to areas in which the expected sanction is lower. Second, local jurisdictions attempting to lower their crime rates will react to policies adopted by neighboring jurisdictions and try to keep up with their neighbors\u27 sanctioning levels. In other words, the optimal expected sanction for a certain jurisdiction cannot be derived from the characteristics of that jurisdiction alone; it must incorporate the expected sanctions of neighboring jurisdictions. Third, competition among local jurisdictions in the area of criminal justice could be both efficient (a race to the top) and inefficient (a race to the bottom) depending on the specific context over which jurisdictions are competing. In three insightful comments, Professors Rachel Barkow, Sam Gross, and Wayne Logan deepen and broaden the discussion I attempted to start in The Market. They flesh out in great detail some of the theoretical complexities and practical difficulties regarding the competitive forces driving criminal justice policies that I did not fully treat in The Market. Further, they demonstrate that we should use great caution before adopting any policy recommendations based on the insights of The Market. The comments clearly help a great deal to understand the issues at hand; one should not read The Market without reading this correspondence. My goals in this short Reply are twofold. On one hand, I will answer some of the criticisms leveled against the arguments made in The Market. Obviously, due to the constraints of this format, I cannot answer every point made by the commentators, so I will focus my remarks on the main areas of disagreement. On the other hand, I will try to build on the comments to extend my initial analysis. The Reply is divided into two parts. In the first, I shall deal with the existence of competition in the area of criminal justice and defend my claim that competition affects the design of criminal justice polices in a decentralized government. In the second, I will tum to the policy implications of my claims and argue that The Market offers constructive policy recommendations for any decentralized criminal justice system, including the United States

Decentralizing Crime Control: The Political Economy Perspective

In an article recently published on the pages of this Law Review, The Market for Criminal Justice: Federalism, Crime Control, and Jurisdictional Competition ( The Market ), I put forward a theory of crime control in a decentralized government. Specifically, I made three distinct claims. First, criminal justice policies affect the geographic decision of criminals as to where to commit their crimes. Other things being equal, criminal activity will tend to shift to areas in which the expected sanction is lower. Second, local jurisdictions attempting to lower their crime rates will react to policies adopted by neighboring jurisdictions and try to keep up with their neighbors\u27 sanctioning levels. In other words, the optimal expected sanction for a certain jurisdiction cannot be derived from the characteristics of that jurisdiction alone; it must incorporate the expected sanctions of neighboring jurisdictions. Third, competition among local jurisdictions in the area of criminal justice could be both efficient (a race to the top) and inefficient (a race to the bottom) depending on the specific context over which jurisdictions are competing. In three insightful comments, Professors Rachel Barkow, Sam Gross, and Wayne Logan deepen and broaden the discussion I attempted to start in The Market. They flesh out in great detail some of the theoretical complexities and practical difficulties regarding the competitive forces driving criminal justice policies that I did not fully treat in The Market. Further, they demonstrate that we should use great caution before adopting any policy recommendations based on the insights of The Market. The comments clearly help a great deal to understand the issues at hand; one should not read The Market without reading this correspondence. My goals in this short Reply are twofold. On one hand, I will answer some of the criticisms leveled against the arguments made in The Market. Obviously, due to the constraints of this format, I cannot answer every point made by the commentators, so I will focus my remarks on the main areas of disagreement. On the other hand, I will try to build on the comments to extend my initial analysis. The Reply is divided into two parts. In the first, I shall deal with the existence of competition in the area of criminal justice and defend my claim that competition affects the design of criminal justice polices in a decentralized government. In the second, I will tum to the policy implications of my claims and argue that The Market offers constructive policy recommendations for any decentralized criminal justice system, including the United States

The Market for Criminal Justice: Federalism, Crime Control and Jurisdictional Competition

For the most part, the United States has a decentralized criminal justice system. State legislatures define the majority of crimes and set out the punishments for those crimes. In addition, the enforcement of criminal laws lies, in most cases, in the hands of local law enforcement agencies. This article points out how this decentralized structure drives local jurisdictions to harshen their criminal justice system in order to displace crime to neighboring jurisdictions. More precisely, local jurisdictions can attempt to displace crime in two distinct ways. First, they can raise the expected sanction to a level that is higher than that in neighboring jurisdictions in order to become less attractive crime targets. Second, they can remove from them individuals who demonstrated that they have a high propensity to commit crimes. The article then turns to analyze the policy implications of the existence of jurisdictional competition in the area of criminal justice, and argues that the United States’ criminal justice system might need a comprehensive structure reform that will regulate the competitive market for criminal justice

Are All ‘Legal Dollars’ Created Equal?

For several decades law and economic scholars have employed the tools of price theory in order to evaluate an array of legal questions ranging from criminal sanctions to contract remedies. This vast body of literature implicitly assumed that all payments made through the legal system are fungible. In other words, just as a dollar paid for a tomato is identical to a dollar paid for a cucumber, so are a dollar paid as a pollution tax to the government and a dollar paid as compensation to the party injured by the pollution. In this study we challenge this assumption, and present empirical evidence that documents systematic and consistent differences between distinct types of legal payments. We used a sample of 420 students who received a description of a hypothetical scenario that involved the behavior of an owner of a factory that creates a negative externality in its production process. We then manipulated the legal regime that participants were subject to along three dimensions: timing of payment (ex-ante v. ex post), identity of recipient (state vs. injured party), and the level of certainty (certain vs. probable), and compared the way participants perceived the situation using an array of psychological variables. Our findings indicate that there is a continuum of legal payments that are perceived differently by people, and as a result generate distinct incentives. At one end of this continuum lie legal payments that are similar in structure to a paradigmatic price. These are payments made to another private party in advance. At the other end of the continuum lie legal payments that are similar in structure to the paradigmatic punishment. These are payments that are made after the fact to the state, and that their assessment is probabilistic. The analysis presented in the paper offers a significant contribution to current scholarly work in fields such as criminal law, tort law, law enforcement, and environmental regulation. For example, our findings indicate that shifting to a system of pollution taxes might transform the way in which polluters treat the price the law sets for their activity. Furthermore, the framework we introduce in this study can be extended to a wide range of empirical studies that will help broaden our understanding of the social meaning of legal dollars

Criminal Sanctions in the Defense of the Innocent

Under the formal rules of criminal procedure, fact finders are required to apply a uniform standard of proof in all criminal cases. Experimental studies as well as real world examples indicate, however, that fact finders often adjust the evidentiary threshold for conviction in accordance with the severity of the applicable sanction. All things being equal, the higher the sanction, the higher the standard of proof that fact finders will apply in order to convict. Building on this insight, this Article introduces a new paradigm for criminal punishments-a paradigm that focuses on designing penalties that will reduce the risk of unsubstantiated convictions. By setting mandatory penalties of sufficient size, the legal system can induce fact finders to convict only if sufficient admissible evidence proves a defendant\u27s guilt. This Article applies this theoretical framework to three concrete contexts that involve a high risk of erroneous convictions: inchoate crimes, the right to silence, and the punishment of recidivists. It shows that a sanctioning regime that is attuned to the probative function of punishment can protect innocent defendants from unsubstantiated convictions while obeying the dictates of both deterrence and retribution

Outsourcing and Insourcing Crime: The Political Economy of Globalized Criminal Activity

Globalization is on the rise. The last few decades have been marked by dramatic reductions in transaction costs that have helped bring together local markets. Technological advances such as wireless telecommunications and the Internet have connected buyers and sellers of goods and services across the planet through transactions that were not even feasible, let alone cost-effective, as little as a decade ago. No less importantly, the systematic removal of regulatory barriers to international trade has facilitated economic globalization. At the forefront of international economic liberalization, the creation of the World Trade Organization ( WTO ) in 1995 extended multilateral trading rules beyond trade in goods to cover transnational provision of services, protection of intellectual property rights, and technical and health-related standards. Hundreds of Regional Trade Agreements ( RTAs ) that further reduce barriers are complemented by an even greater number of international investment protection agreements called Bilateral Investment Treaties ( BITs ). In the shadow of these economic developments, the same period has also witnessed the rise of transnational crime (roughly defined as serious crime whose perpetration and effects occur in more than one state) as a source of grave concern around the globe. Drug smuggling, arms trading, human trafficking, illegal sex trade, money laundering, wholesale intellectual property rights infringement- these and other illicit activities have flourished due to the advances of technology and the freer movement of goods, services, money, and people that characterize the modern world, just as legal international business transactions have flourished. There are, no doubt, direct links between technological progress and economic liberalization, on the one hand, and the growth of transnational crime and the accompanying anxiety, on the other hand. For example, illegal child pornography became easier to distribute via the Internet, and the removal of barriers to international trade in goods and the free flow of funds may have facilitated cross-border trafficking in illicit drugs. As such, transnational crime is indeed the dark side of globalization, and it is not surprising that national governments and law enforcement agencies worldwide have increasingly turned to international law and international cooperation to fight it, considerably augmenting the international legal field of global crime control

Seeing is Believing: The Anti-Inference Bias

A large body of studies suggests that people are reluctant to impose liability on the basis of circumstantial evidence alone, even when this evidence is more reliable than direct evidence. Current explanations for this pattern of behavior focus on factors such as the tendency of fact finders to assign low subjective probabilities to circumstantial evidence, the statistical nature of such evidence, and the fact that direct evidence can rule out with greater ease any competing factual theory regarding liability. This Article describes a set of four new experiments demonstrating that even when these factors are controlled for, the disinclination to impose liability based on indirect evidence remains. While these findings do not necessarily refute the existing theories, they indicate that these theories are incomplete and point to the existence of a deep-seated bias against basing liability on inferences—an antiinference bias. The Article discusses the potential policy implications of the new findings for procedural and substantive legal norms

Exponential Growth Bias and the Law: Why Do We Save Too Little, Borrow Too Much, and Fail to React on Time to Deadly Pandemics and Climate Change?

Many human decisions, ranging from the taking of loans with compound interest to fighting deadly pandemics, involve phenomena that entail exponential growth. Yet a wide and robust body of empirical studies demonstrates that people systematically underestimate exponential growth. This phenomenon, dubbed the exponential growth bias (“EGB”), has been documented in numerous contexts and across different populations, using both experimental and observational methods. Despite its centrality to human decisionmaking, legal scholarship has thus far failed to account for the EGB. This Article presents the first comprehensive study of the EGB and the law. Incorporating the EGB into legal analysis sheds a new light on a long list of policy debates and highlights new solutions to many problems that the legal scholarship has been grappling with. More concretely, in the sphere of policymaking, the EGB explains the systematically delayed legal response to novel exponential risks such as the COVID-19 pandemic and climate change. Building on this insight, this Article highlights new legal strategies that could improve officials’ ability to react promptly and effectively to such threats. In the sphere of individual decisionmaking, this Article shows that the EGB causes people to systematically err when making decisions that involve exponential phenomena. Consequently, people often borrow too much, save too little, and fall prey to sophisticated marketing tactics. In light of these findings, this Article presents a novel regulatory framework, which includes new disclosure duties that could assist people to grasp the long-term implications of their choices, and the imposition of mandatory rules that would minimize the exploitation of the EGB by savvy profit-maximizing entrepreneurs