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

Economic theory suggests that the deterrence of deviant behavior is driven by a combination of severity and certainty of punishment. This paper presents the first controlled experiment to study a third important factor that has been mainly overlooked: the swiftness of formal sanctions. We consider two dimensions: the timing at which the uncertainty about whether one will be punished is dissolved and the timing at which the punishment is actually imposed, as well as the combination thereof. By varying these dimensions of delay systematically, we find a surprising non-monotonic relation with deterrence: either no delay (immediate resolution and immediate punishment) or maximum delay (both resolution and punishment as much as possible delayed) turn out equally effective at deterring deviant behavior and recidivism in our context. Our results yield implications for the design of institutional policies aimed at mitigating misconduct and reducing recidivism.
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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 and Kleiman, 2009; Kilmer et al., 2013; Alm, 2014; Nicosia et al., 2016, for a discussion of empirical evidence see Doleac, 2018). 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