Richard H. McAdams

The Origin, Development, and Regulation of Norms

Internalized Norms ................... 382 C. A Unified Theory of Group and Societal N orm s ......................................... 386 * Professor, Boston University School of Law. B.A. 1982, University of North Carolina; J.D. 1985, University of Virginia. Ed. I researched this article while on the faculty at Chicago-Kent College of Law and I would like to thank many colleagues there for their support and assistance, particularly Anita Bernstein, Jacob Corr6, Rick Hasen, Steve Heyman, and Hal Krent. In addition, I appreciate the helpful comments on drafts I received from Robert Ellickson, Lawence Lessig, Saul Levinore, David Lyons, Anna-Maria Marshall, Philip Pettit, Eric Posner, Robert Seidman, and the participants in faculty workshops at Boston University and the University of Illinois. My work on this article was supported by the Marshall D. Ewell Fund. HeinOnline -96 Mich. L. Rev. 338 1997-1998

Punitive Police? Agency Costs, Law Enforcement, and Criminal Procedure

Criminal law enforcement depends on the actions of public agents such as police officers, but the resulting agency problems have been neglected in the law and economics literature (especially outside the specific context of corruption). We develop an agency model of police behavior that emphasizes intrinsic motivation and self-selection. Drawing on experimental evidence on punishment preferences, in which subjects reveal a heterogeneous preference for punishing wrongdoers, our model identifies circumstances in which “punitive” individuals (with stronger-than-average punishment preferences) will self-select into law enforcement jobs that offer the opportunity to punish (or facilitate the punishment of) wrongdoers. Such “punitive” agents will accept a lower salary, but create agency costs associated with their excessive zeal (relative to the public’s preferences) in searching, seizing, and punishing suspects. In our framework, the public chooses (under reasonable assumptions) to hire punitive police agents, while providing suspects with strong criminal procedure protections, thereby empowering other agents (such as the judiciary) with average punishment preferences to limit the agency costs of excessive zeal. We thus argue that intrinsic motivation and self-selection provide a possible explanation for the bifurcated structure of criminal law enforcement in which courts constrain police with pro-defendant rules of criminal procedure. We also explore various other implications of this framework.

Norms in Law and Economics

Everyone realizes the importance of social norms as guides to behavior and substitutes or complements for law. Coming up with a paradigm for analyzing norms, however, has been surprisingly difficult, as has systematic empirical study. In this chapter of the Handbook of Law and Economics, edited by A. Mitchell Polinsky and Steven Shavell and forthcoming in 2005, we survey the topic.

Behavioral Criminal Law and Economics

Criminal Law and Economics applies economic theory to explain crime, law enforcement, criminal law and criminal procedure. This pathbreaking book draws together sixteen chapters by leading scholars in the field, summarizing theoretical and empirical work researched to date on criminal law and economics. The topics range from private and public enforcement of the law, criminal procedure and regulation to terrorism, cyber crime and tax evasion. The expert contributors also cover the political economy of criminal law as well as behavioral criminal law and economics.

Chapter 20 Norms and the Law

Abstract Everyone realizes the importance of social norms as guides to behavior and substitutes for law, but coming up with a paradigm for analyzing norms has been surprisingly difficult, as has systematic empirical study. In this chapter we survey the topic.

Conventions and Norms (Philosophical Aspects)

This entry defines and distinguishes the concepts of convention and norm. Both terms refer to behavioral regularities. Lewis (1969) provisionally (and roughly) defined a convention as the set of coordinated expectations that solve a recurrent coordination problem. More recent game theory implies a broader definition: that a convention is a prevailing Nash equilibrium, and its attendant expectations, in a situation with at least one alternative equilibrium. The existence of multiple equilibria captures the intuition that conventions are arbitrary. By contrast, the central feature of a norm is that the behavioral regularity is supported, at least in part, by the fact that most or all individuals in the relevant population approve of conformity to the regularity and/or disapprove of non-conformity. The existence of normative approval or disapproval captures the intuition that norms are obligatory. Conventions and norms are distinct because norms need not be arbitrary (there may be no other possible equilibrium) and conventions need not be supported by approval or disapproval. Nonetheless, many actual behavioral regularities are both conventions and norms.

The Surprisingly Complex Case Against Theft

Explaining the efficiency of laws against theft is a more complicated matter than it first appears to be. Fred McChesney (1993), responding to a 1990 article by Lewin and Trumbell, argues that theft is inevitably inefficient when the indirect costs of the activity are considered. McChesney traces his analysis to a 1967 paper by Gordon Tullock, in which Tullock discussed the inefficiency of theft, rent-seeking, and monopolies. Richard Posner (1985; 1992) provides a different line of reasoning that focuses on the direct costs of theft. He claims that, because the market is adept at transferring goods to their highest valued use, those who bypass the market -- thieves -- on average value the goods they steal less than the owners. Neither analysis of theft, however, is entirely sufficient to explain its inefficiency.As Part I of this paper explains, the Tullock-McChesney resolution is flawed. Notwithstanding the existence of indirect costs, theft is efficient if incurring those costs avoids incurring larger transaction costs from a voluntary sale and the thief values the goods more than the owner does. More generally, an efficiency analysis requires comparing the indirect costs of legalized theft with the transaction costs of market sales. In Part II, we make this comparison. Unsurprisingly, theft is inefficient, though for more complex and less certain reasons than the Tullock-McChesney thesis suggests: because indirect costs *usually* would exceed transaction costs and because indirect costs *often* would not avoid incurring transaction costs. The surprising result of our model is that Posners theft analysis, while correct in a static model, turns out not to matter much to the dynamic inefficiency of theft. In equilibrium, very little of the costs of theft would be from transfers to lower valued users. Thus, we ultimately agree with Tullock and McChesney that the real problem with theft is its indirect costs. Finally, in Part III we discuss how this analysis bears on the criminal rules that define when involuntary takings constitute theft.

The Distributive Deficit in Law and Economics

Welfarist law and economics ignores the distributive consequences of legal rules to focus solely on efficiency, even though distribution unambiguously affects welfare, the normative maximand. The now-conventional justification for disregarding distribution is the claim of tax superiority: that the best means of influencing or correcting distribution is via tax-and-transfer. Critics have observed that optimal redistribution through tax may be politically infeasible, but have generally overlooked the rejoinder that the same political impediments to redistribution through tax will block redistribution through legal rules. This “invariance hypothesis,” as we label it, holds that there is only one distributive equilibrium and that Congress will offset through tax any deviations from it. We highlight the centrality of invariance to the conventional economic wisdom and assert that it is just as relevantly false as the zero transaction cost assumption. In contexts where political impediments to tax-based redistribution exceed the impediments to doctrinal redistribution, it may be possible to increase welfare by redistributing outside of tax. Welfarists should, therefore, devote as much scholarly attention to the “political action costs” of redistribution as they do to transaction costs.

Fairness in Law and Economics

Along with an original introduction by the editors this is a must-have volume that will appeal to students, academics and practitioners who are interested in this exciting field.

The Effect of Collective Bargaining Rights on Law Enforcement: Evidence from Florida

Growing controversy surrounds the impact of labor unions on law enforcement behavior. Critics argue that unions impede organizational reform and insulate officers from discipline for misconduct. Yet collective bargaining tends to increase wages, which could improve officer behavior. We provide quasi-experimental empirical evidence on the effects of collective bargaining rights on violent incidents of misconduct. Our empirical strategy exploits a 2003 Florida Supreme Court decision (Williams), which conferred collective bargaining rights on sheriffs’ deputies, resulting in a substantial increase in unionization among these officers. Using a Florida state administrative database of “moral character” violations reported by local agencies between 1996 and 2015, we implement a difference-in-difference approach in which police departments (which were unaffected by Williams) serve as a control group for sheriffs’ offices (SOs). Our estimates imply that collective bargaining rights led to a substantial increase in violent incidents of misconduct among SOs, relative to police departments. The effect of collective bargaining rights is concentrated among SOs that subsequently adopted collective bargaining agreements, and the timing of the adoption of these agreements is associated with increases in violent misconduct. There is also some evidence consistent with a “bargaining in the shadow” effect among SOs that did not unionize.Growing controversy surrounds the impact of labor unions on law enforcement behavior. Critics allege that unions impede organizational reform and insulate officers from discipline for misconduct. The only evidence of these effects, however, is anecdotal. We exploit a quasiexperiment in Florida to estimate the effects of collective bargaining rights on law enforcement misconduct and other outcomes of public concern. In 2003, the Florida Supreme Court’s Williams decision extended to county deputy sheriffs collective bargaining rights that municipal police officers had possessed for decades. We construct a comprehensive panel dataset of Florida law enforcement agencies starting in 1997, and employ a difference-in-difference approach that compares sheriffs’ offices and police departments before and after Williams. Our primary result is that collective bargaining rights lead to about a 27% increase in complaints of officer misconduct for the typical sheriff’s office. This result is robust to the inclusion of a variety of controls. The time pattern of the estimated effect, along with an analysis using agency-specific trends, suggests that it is not attributable to preexisting trends. The estimated effect of Williams is not robustly significant for other potential outcomes of interest, however, including the racial and gender composition of agencies and training and educational requirements. Acknowledgments: We thank Morgen Miller and Rafeh Qureshi of the Coase-Sandor Institute for Law and Economics at the University of Chicago Law School for their outstanding work in constructing the dataset used in this paper, and Whittney Barth, Jeremy Chen, Alan Hassler, Isabella Nascimento, Eileen Prescott, and Christopher Walling for excellent research assistance. We also thank Terry Baker and Stacey Price of the Florida Department of Law Enforcement (FDLE) for providing the data and for patiently answering our questions. Margaret Schilt of the University of Chicago Law Library kindly helped us with background research on Florida law enforcement agencies. We also thank William Hubbard, Vic Khanna, Anup Malani, Kyle Rozema, Kim Rueben, Juan Carlos Suarez-Serrato, Andrew Verstein, and Eric Zwick for helpful conversations. Dharmapala acknowledges the financial support of the Lee and Brena Freeman Faculty Research Fund at the University of Chicago Law School. Rappaport acknowledges the Darelyn A. and Richard C. Reed Memorial Fund. Any remaining errors or omissions are, of course, our own.