Efficient Institutions and Effective Deterrence: On Timing and Uncertainty of Formal Sanctions

In reality, the closest we can get to achieving maximal swiftness (celerity) of punishment is by catching deviants in the act and punishing them right away. For example, during the FIFA World Cup 2010 in South Africa, the local government agreed to establish 56 so-called ‘World Cup Courts’ across the country, assigning 1,500 dedicated personnel including magistrates, prosecutors, and public defenders. This was done to achieve speedy justice, in some cases leading to convictions on the same day. Recently, the concept of celerity has entered the correctional arena through the project HOPE (Hawaii Opportunity Probation with Enforcement) as a new model for probation. “In 2004, First Circuit Judge Steven Alm launched a pilot program to reduce probation violations by drug offenders and others at high risk of recidivism. This high-intensity supervision program, called HOPE Probation […], is the first and only of its kind in the nation. Probationers in HOPE Probation receive swift, predictable, and immediate sanctions – typically resulting in several days in jail – for each detected violation, such as detected drug use or missed appointments with a probation officer” (Alm, 2014). In a first pilot, the project was found to reduce drug use, crime, and incarceration. Simultaneously, it saved the government approximately $6,000 per participant per year through reduced incarceration (Hawken & Kleiman, 2009).

The existing line of research that has acknowledged the relevance of celerity has often resorted to observational studies with mixed approaches and insights. However, as also recognized by this stream of literature, the common absence of reliable observational data and the ability to account for potentially confounding influences (i.e., perceived or actual certainty or severity of punishment) render the study of celerity methodologically challenging (for a critical discussion, see Pratt & Turanovic 2018). A natural starting point to look for a clean effect is the laboratory environment in which institutional constraints are absent and where we can precisely control the incentives and relevant timings of resolution and punishment (Charness & DeAngelo, 2018). This is in the spirit of the recent surge of experimental economists studying related topics, such as corruption or tax evasion (e.g., Abbink 2018 ; Serra 2011) in controlled laboratory environments. This allows us to control the important elements of celerity: anticipation and revelation of information, timing and severity of punishment, and the opportunity to recidivate. Our experimental analysis is based on a novel cheating game where subjects may cheat in periodic instances to increase payoffs. These cheating periods are followed by an investigation such that cheaters will be detected and fined with a given probability. Across different treatments, we systematically vary the timing of both the resolution of uncertainty about whether one will be punished and actually being punished.
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Our study provides a first step into analyzing the effects of deterrence in a sanctioning system. In order to draw conclusions for an optimal policy in the real world, future research needs to tackle several limitations of our study. In particular, it seems necessary to study celerity when the delay of punishment extends to the real payout of subjects. While the concept of celerity has already been backed theoretically in the scholarly literature for an extended period of time, only recently has the concept of celerity entered the correctional arena through the project HOPE (Hawaii Opportunity Probation with Enforcement) as a new model for sanctions and probation (Hawken & Kleiman, 2009; Kilmer et al., 2013; Alm, 2014; Nicosia et al., 2016). More research should follow and consider additional aspects such as the role of optimal delay, which can be very sensitive to the type of punishment (e.g., the optimal delay may be rather different for monetary fines than for imprisonment). With this in mind, we are confident that our study highlights the role of celerity in designing optimal sanctioning systems and points to fruitful avenues for future research.