Working Paper: CEPR ID: DP10994
Authors: Francesc Dilm; Daniel Garrett
Abstract: Successes of law enforcement in apprehending offenders are often publicized events. Such events have been found to result in temporary reductions in offending, or "residual deterrence". We provide a theory of residual deterrence which accounts for the incentives of both enforcement officials and potential offenders. Our theory rests on the costs of reallocating enforcement resources. In light of these costs, we study the determinants of offending such as the role of public information about enforcement and offending.
Keywords: Deterrence; Enforcement; Reputation
JEL Codes: C73; K42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Past convictions by the regulator (G18) | Temporary reduction in offending behavior by firms (D22) |
| Switching costs for the regulator (L51) | Existence of residual deterrence (K49) |
| Decreasing switching costs (D43) | Diminished episodes of residual deterrence (H56) |
| Regulator's decision-making process (L51) | Firms' behavior (D21) |
| Increasing penalties (K42) | Higher long-run average rates of offending (K14) |
| Regulator's inspection frequency influences firms' strategies (L10) | Firms adjust their strategies based on the regulator's inspection frequency (L10) |