Of Coase, Cattle, and Crime: Why the Becker Model is Compatible with a Moral Theory of Criminal Law

Abstract

Abstract The economic model of crime is often portrayed (and criticized) as being contrary to a moral theory of criminal law. This paper advances the opposing view that the two theories are in fact potentially compatible with one another. The basis for this claim is that, whereas the Becker (1968. Crime and punishment: an economic approach. J. Polit. Econ. 76: 169–217) model is useful in prescribing a theory of optimal enforcement of the law, it does not, and indeed cannot, provide a definitive prescription for its content. The reason is the reciprocal nature of harm in situations involving incompatible rights, a principle first identified by Coase (1960. The problem of social cost. J. Law Econ. 3: 1–44) in the general context of externalities. The paper develops this argument, offers a formal demonstration of it, and draws out some of its implications.