Punishing Corporations

This paper explores the legal and economic theories, and empirical evidence of government-imposed punishment for corporate wrongdoing. Among the questions addressed are: What is the purpose of corporate criminal law? How are sanctions to be determined? When should firms versus individuals be held criminally liable for corporate wrongdoing? When should the criminal law be used instead of regulatory agency actions? Regardless of the rationale, criminal punishment of corporations for the wrongdoing of its owners, managers, and/or employees, has taken on an important role in the U.S. and globally. The limited empirical evidence on the use of criminal sanctions for corporate wrongdoing since the 1980s shows considerable increases in monetary sanctions over time. However, a large part of that increase can be attributed to larger crimes, not just larger sanctions. The use of nonmonetary sanctions (e.g., corporate probation) has also grown significantly over time.