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Abstract:
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"The standard crime and punishment literature predicts that it is optimal for the ruler to use the maximum punishment available in case a crime is committed. However, empirical studies show that punishments are, in general, smaller than the maximum punishment available. The usual explanation is that punishment is costly (i.e. maintaining the prisons, guards, etc). However, we do not observe the maximum punishment rule even in cases in which punishment is costless (i.e. trac nes). Moreover, punishments depend on the characteristics of the accused (i.e. teenagers receive lower punishments than adults for the same crime). However, the literature nds that the business cycle and the crime rate is uncorrelated. Hence, we need to explain why, imposing the maximum punishment is not optimal and why the punishments change with some observables and not others. I use a novel data set from a self-governed community of farmers in 19th-20th centuries Spain. In this data, the maximum punishment available is only rarely used, although punishment is costless. Also, punishments are aected by observables characteristics. In my data, there no correlation between the punishment and the business cycle. I propose a model that can explain the lack of maximum punishment, even when the punishment is costless. The model also gives an intuitive explanation for progressivity on the punishment. Finally, the model predicts that punishments (and crime rates) could be cyclical or counter-cyclical, depending on the parameters. I use the data to estimate and test the model."
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