Law Enforcement and Wrongful Arrests With Endogenously (In)competent Officers

Abstract

Economic intuition suggests that enforcement errors incentivize crimes, therefore officers must be penalized for committing such errors. Legal scholars argue that if penalties for errors are severe, officers may become timid while policing (thereby encouraging crime). We evaluate these arguments in a model where officers invest in competence. Competence increases the officer's ability to identify criminals. Low sanctions for errors encourages bold policing by officers but may still raise the equilibrium level of crime because it also discourages investments in competence. Granting immunity to only competent officers (“qualified immunity”) reduces both errors and crimes when competence is observable. (JEL K4, K42, L5)

Does it matter who extorts? Extortion by competent and incompetent enforcers*

“…This last result is worth contrasting with Mishra and Samuel (2018). In that paper, an equilibrium with full immunity (d = 0) need not be worse than one with no immunity.…”

“…Thus, it is natural and not surprising that extortion by incompetent officers has very different implications from extortion by competent officers. 4 Finally, it is worth noting that the effect of competence on compliance is also observed in Mishra and Samuel (2018). However, that paper did not study extortion.…”

“…First, empirically there is ample evidence that the threat of unnecessary harassment encourages compliant agents to yield to extortion demands (Gambetta, 2009). Extortion by competent officers can be deterred by suitable incentive mechanisms or immunity regimes (Mishra & Samuel, 2018), but it is harder to identify policies that deter extortion by incompetent officers. Second, in the context of bribery, preemptive bribery which occurs (under imperfect information) before the officer has exerted effort to observe the agent's type, has very different implications than standard (ex‐post) bribery (which occurs after, and only if, the officer has ascertained that the agent is not compliant) (Mishra & Samuel, 2017; Motta, 2009; Samuel, 2009).…”

“…Since we wish to study extortion, we focus only on equilibria in which this condition (1) is satisfied. 10 This must be contrasted with Mishra and Samuel (2018) who study equilibria where harassment may or may not be individually rational for the officer (i.e., where this condition may be violated). Thus, our paper identifies additional equilibria to those in Mishra and Samuel (2018) (in which harassment is rational) because here officers are also corruptible.…”

“…10 This must be contrasted with Mishra and Samuel (2018) who study equilibria where harassment may or may not be individually rational for the officer (i.e., where this condition may be violated). Thus, our paper identifies additional equilibria to those in Mishra and Samuel (2018) (in which harassment is rational) because here officers are also corruptible. As we show in section 4, this has implications for the regulator's policy.…”