Working Paper: CEPR ID: DP14476
Authors: Hansjoachim Voth; Guo Xu
Abstract: Can severe penalties ”encourage the others”? Using the famous case of the British Admiral John Byng, executed for his failure to recapture French-held Menorca in 1757, we examine the incentive effects of judicial punishments. Men related to Byng performed markedly better after his unexpected death. We generalize this result using information from 963 court martials. Battle performance of captains related to a courtmartialed and convicted officer improved sharply thereafter. The loss of influential connections was key for incentive effects – officers with other important connections improved little after Byng’s execution or other severe sentences.
Keywords: Principal-Agent Problems; Punishment; Labor Incentives
JEL Codes: D91; J20; N33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Admiral Byng's execution (Y50) | Performance of officers with close ties to Byng (Y50) |
| Loss of influential connections (Z13) | Performance of officers connected to court-martialed officers (D73) |
| Court-martial of senior officer (H56) | Incentive for junior officers to distinguish themselves (Y40) |
| Increased incentive to perform (D29) | Performance of officers connected to court-martialed officers (D73) |