ABSTRACT
This chapter reviews economic arguments for the existence of a separate category of law aimed at enforcing the prohibition of certain harmful acts that society has chosen to label as crimes. The arguments presented have dispelled some traditional explanations as unconvincing while finding others more consistent with observed differences between criminal and tort law. A different explanation for public enforcement of criminal law focuses on the cost to victims of identifying and bringing suit against the party responsible for their injuries. When that cost is high, or if the harm is dispersed across a large number of victims so that none finds it worthwhile to pursue a claim, some injurers will escape punishment under a purely private system of enforcement. There are private solutions to the under-detection problem. One is suggested by the economic theory of punitive damages, which is also based on the problem of inadequate detection of some injurers.
