Di Tella, Rafael and Dubra, Juan (2006): Crime and Punishment in the "American Dream".
Download (363kB) | Preview
We observe that countries where belief in the "American dream" (i.e., effort pays) prevails also set harsher punishment for criminals. We know from previous work that beliefs are also correlated with several features of the economic system (taxation, social insurance, etc). Our objective is to study the joint determination of these three features (beliefs, punitiveness and economic system) in a way that replicates the observed empirical patterns. We present a model where beliefs determine the types of contracts that firms offer and whether workers exert effort. Some workers become criminals, depending on their luck in the labor market, the expected punishment, and an individual shock that we call "meanness". It is this meanness level that a penal system based on "retribution" tries to detect when deciding the severity of the punishment. We find that when initial beliefs differ, two equilibria can emerge out of identical fundamentals. In the "American" (as opposed to the "French") equilibrium, belief in the "American dream" is commonplace, workers exert effort, there are high powered contracts (and income is unequally distributed) and punishments are harsh. Economists who believe that deterrence (rather than retribution) shapes punishment can interpret the meanness parameter as pessimism about future economic opportunities and verify that two similar equilibria emerge.
|Item Type:||MPRA Paper|
|Original Title:||Crime and Punishment in the "American Dream"|
|Keywords:||beliefs; multiple equilibria; illegal behavior; fines; sentences|
|Subjects:||K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
K - Law and Economics > K1 - Basic Areas of Law > K14 - Criminal Law
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy
|Depositing User:||Juan Dubra|
|Date Deposited:||18. Oct 2006|
|Last Modified:||12. Feb 2013 06:23|
Agnew, Robert (1999) "A General Strain Theory of Community Differences in Crime Rates", Journal of Research in Crime and Delinqunecy, 36, 123-155.
Alesina, Alberto and George-Marios Angeletos (2005): "Corruption, Inequality and Fairness," Journal of Monetary Economics, vol. 52(7), pp. 1227-44.
Alesina, Alberto and George-Marios Angeletos (2005): "Fairness and Redistribution," American Economic Review, 95(4), 960-980.
Alesina, Alberto, Edward Glaeser and Bruce Sacerdote (2005) "Work and Leisure in the US and Europe: Why so Different?", mimeo.
Alesina, Alberto, Edward Glaeser and Bruce Sacerdote (2001) "Why Does´'t the US have a European Style Welfare State?", Brookings Papers on Economic Activity.
Alesina, Alberto, and Eliana La Ferrara (2005), "Redistribution in the Land of Opportunities," Journal of Public Economics, LXXXIX, 897--931.
Baker, George, Michael Gibbs, and Bengt Holmstrom (1994) "The Internal Economics of the Firm: Evidence from Personnel Data", Quarterly Journal of Economics, 109.
Becker, G. (1968) "Crime and Punishment: an Economic Approach," Journal of Political Economy, 76(2), 169-217.
Benabou, Roland (2000) "Unequal Societies: Income Distribution and the Social Contract", American Economic Review, 90, March, 96-129
Benabou, Roland and Efe A. Ok (2001) "Social Mobility and the Demand for Redistribution: The POUM Hypothesis", Quarterly Journal of Economics, 116(2), 447-487.
Benabou, Roland and Jean Tirole (2005) "Belief in a Just World and Redistributive Policies", forthcoming Quarterly Journal of Economics.
Benoît, J-P and J. Dubra, (2004), "Why do Good Cops Defend Bad Cops?," International Economic Review, 45.
Benoît, J-P and M. Osborne (1995), "Crime, Punishment, and Social Expenditure," Journal of Institutional and Theoretical Economics 151, 326-347.
Bowles, Samuel and Herbert Gintis (1976) Schooling in Capitalist America: Educational Reform and the Contradictions of Economic Life, NewYork: Basic Books.
Cohen, Mark, Rust, Roland and Sara Steen (2002) "Measuring Public Perceptions of Appropriate Prison Sentences", mimeo.
Cullen, Francis and Robert Agnew (2003), "Anomie/Strain Theories of Crime", Part V in Criminological Theory: Essential Readings, Francis Cullen and Robert Agnew (editors), Los Angeles, California: Roxbury Publishing Company.
Darley, J. M., Sanderson, C. A. and LaMantia, P. S. (1996). "Community standards for defining attempt: Inconsistencies with the Model Penal Code," American Behavioral Scientist, 39, 405--420.
Davis, Michael (1992) To Make the Punishment Fit the Crime, Essays in the Theory of Criminal Justice, Westview Press.
Denzau, Arthur and Douglass North, (1994) "Shared Mental Models: Ideologies and Institutions," Kyklos, vol. 47(1), pages 3-31.
Di Tella, Rafael and Robert MacCulloch (2002) "Why doesn't Capitalism flow to poor Countries", mimeo, Harvard Business School.
Di Tella, Rafael and Robert MacCulloch (2003) "Europe vs America: Institutional Hysteresis in a Simple Normative Model", mimeo Harvard Business School, forthcoming Journal of Public Economics.
Eaton, B.C. and W.D. White (1991), "The Distribution of Wealth and the Efficiency of Institutions," Economic Inquiry, 29, 336-50.
Echenique, F. (2002), "Comparative Statics by Adaptive Dynamics and The Correspondence Principle," Econometrica, 70(2).
Ehrlich, I. (1975), "The Deterrent Effect of Capital Punishment: a Question of Life and Death," American Economic Review, 55, 397-417.
Fong, Christina (2001) "Social Preferences, Self Interest, and the Demand for Redistribution", Journal of Public Economics, LXXXII, 225-46.
Forsythe, R., Horowitz, J.L., Savin N.E. and M. Sefton (1994) "Fairness in Simple Bargaining Games", Games and Economic Behavior 6, 347-369.
Freeman, Richard (1996) "Why do so many young american men commit crimes and what might we do about it?" Journal of Economic Perspectives, 10(1), 25-42..
Glaeser, Ed and Bruce Sacerdote (2000) "The Determinants of Punishment: Deterrence, Incapacitation and Vengeance", NBER Working Paper No. W7676.
Guth, W., Schmittberger, R. and B. Schwarze (1982) "An Experimental Analysis of Ultimatum Bargaining", Journal of Economic Behavior and Organization, 3, 367-388.
Hall, Peter and David Soskice (2001) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford: Oxford University Press.
Harris, J. (1970), "On the Economics of Law and Order," Journal of Political Economy, 78(1), 165-174.
Hassler, John, Jose´ V. Rodriguez-Mora, Kjetil Storesletten, and Fabrizio Zillibotti, "The Survival of the Welfare State," American Economic Review, XCIII (2003), 87--112.
Kant, Immanuel (1952). The science of right (W. Hastie, Trans.). In R. Hutchins (Ed.), Great books of the Western world: Vol. 42. Kant (pp. 397--446). Chicago: Encyclopedia Britanica. Hillsdale, NJ: Erlbaum.
Kleinig, John, 1973, Punishment and Desert, The Hague: Martinus Nijhoff.
Kahneman, D., Schkade, D. and Sunstein, C. R. (1998) "Shared outrage and erratic awards: The psychology of punitive damages," Journal of Risk and Uncertainty, 16, 49--86.
Lakoff, George (1996) Moral Politics: How Liberals and Conservatives Think, London: University of Chicago Press
Langan, Patrick and David Levin, (2002) "Recidivism of Prisoners Released in 1994," Bureau of Justice Statistics Special Report.
Levine, David K. (1998) "Modelling Altruism and Spitefulness in Experiments", Review of Economic Dynamics 1, 593-622.
Levitt, Steven (2004) "Understanding Why Crime Fell in the 1990s: Four Factors That Explain the Decline and Six That Do Not," Journal of Economic Perspectives, 18(1), pp. 163-90.
Nisbet, R. and D. Cohen (1996) Culture of Honor: The Psychology of Violence in the South, Boulder: Westview Press.
Martinson, Robert, 1974, "What Works? -- Questions and Answers About Prison Reform," The Public Interest, 10, pp. 22-54.
Mayhew, Pat and Jan van Dijk (1997) Criminal Victimization in 11 Industrialized Countries, The Hague: Dutch Ministry of Justice.
Merton, Robert K. (1938) "Social Structure and Anomie", American Sociological Review, 3, October, 672-82.
Messner, Steven and Richard Rosenfeld (2001) "Crime and the American Dream", Chapter 19 in Criminological Theory: Essential Readings, Francis Cullen and Robert Agnew (editors), Los Angeles, California: Roxbury Publishing Company.
Milgrom, P. and J. Roberts, (1994) "Comparing Equilibria," American Economic Review, 84(3), 441-59.
Milgrom, Paul and Chris Shannon (1994) "Monotone Comparative Statics", Econometrica, 62(1), 157-180.
Mookherjee, Dilip and Ivan Png (1992) "Monitoring vis a vis Investigation in the Enforcement of Law", American Economic Review, 82(3), 556-565.
Mulligan, Casey and Andrei Shleifer (2005) "The Extent of the Market and the Supply of Regulation", Quarterly Journal of Economics, 120(4), 1445-73.
Piketty, Thomas (1995) "Social Mobility and Redistributive Politics", Quarterly Journal of Economics, 110, 551-584.
Primoratz, Igor (1989), "Justifying Legal Punishment", Atlantic Highlands, NJ: Humanities Press International.
Rotemberg, Julio J., "Perceptions of Equity and the Distribution of Income," Journal of Labor Economics, XX (2002), 249--288.
Rotemberg, Julio (2003) "Minimally Acceptable Altruism and the Ultimatum Game", mimeo.
Rossi, P. H., Waite, E., Bose, C. E. and Berk, R. E. (1974) "The seriousness of crimes: Normative structure and individual differences," American Sociological Review, 39, 224--237.
Ruggie, John (1998) "What Makes the World Hang Together? Neo-utilitarianism and the Social Constructivist Challenge", International Organization, 52 (4), 855-85.
Saint-Paul, Gilles, "The Dynamics of Exclusion and Fiscal Conservatism," Review of Economic Dynamics, IV (2001), 275--302.
Searle, John (2005) "What is an Institution?", Journal of Institutional Economics, 1 (1), 1--22.
Shavell, Steven (1987) "The Optimal Use of Nonmonetary Sanctions as a Deterrent," American Economic Review, 77(4), 584-592.
Tonry, Michael and Kathleen Hatlestad (1997) Sentencing Reform in Overcrowded Times, a Comparative Perspective, New York: Oxford University press.
Tonry, Michael (1998) "Introduction: Crime and Punishment in America", in The Handbook of Crime and Punishment, Michel Tonry (editor), New York: Oxford University Press.
Wacquant, Loïc (1999) Le Prisions de la misêre, Éditions Raisons D' Agir, Ediciones Manantial.
Wacquant, Loïc (2000) "Deadly symbiosis: when ghetto and prison meet and mesh," Punishment and Society 3(1): 95-134
Whitman, James Q. (2003) Harsh Justice: Criminal Punishment and the Widening Divide between America and Europe, Oxford: Oxford University Press.