Plea Bargaining with Budgetary Constraints and Deterrence

In this paper, I construct a simple model that illustrates conditions under which increased criminal sanctions can lead to increased levels of crime. This finding is derived from the interaction of binding budgetary constraints and plea bargaining, given that the costs of trial are assumed to be increasing in the size of sanction. In an environment with these institutional features, maximal sanctions are not optimal when resources are limited, and increased sanctions cannot generally be viewed as a substitute for increased monitoring. In this framework, increasing sanctions for different offences proportionally can lead criminals to substitute between offences. In fact, increased sanctions can lead to more severe crime. This effect is unambiguous when the marginal cost of trial is constant or increasing. The increasing cost of trial can imply that even when a proportional sanction increase implies a reduction in total crime levels it may imply an increase in severe offences, since some minor criminals will substitute into more severe crimes. This model also suggests that increased resources for prosecutors deter crime. 1Special thanks to Dan Bernhardt and Patrick Francois for encouragement and supervision. Chris Ferrall, Steeve Mongrain, John Spicer, and Dan Usher provided helpful comments. I am grateful to the Social Science and Humanities Research Council of Canada for financial support. All errors are my own.