Profit-Seeking Punishment Corrupts Norm Obedience

Profit-Seeking Punishment Corrupts Norm Obedience (link to the article)

Erte Xiao

Punishment typically involves depriving violators of resources they own such as money or labor. These resources can become revenue for authorities and thus motivate profit-seeking punishment. In this paper, we provide a new perspective on the causal relationship between legal institutions that embed corrupting temptations (e.g., profitable punishment) and prevalent norm disobedience within the societies such institutions govern. We emphasize that punishment not only changes the incentives to violate norms but also, perhaps more importantly, expresses disapproval of norm violations. We design a novel experiment to provide direct evidence on the role punishment plays in communicating norms, and provide experimental evidence indicating that when enforcers can benefit monetarily by punishing, people no longer view punishment as signaling a norm violation. The result is substantial mitigation of punishment's ability to influence behavior. Our findings draw attention to the detrimental effect of profit-seeking punishment enforcement on the efficacy of punishment.

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  • Hugo Mercier
    Hugo Mercier 14 February 2011 (15:22)

    Hi Erte, Thanks for sharing this paper. I have a few questions for you: -a detail: in your “norm irrelevant” condition, you say that punishment does not communicate any information, but in practice punishment does not have to be perfectly correlated with norm-breaking to communicate some information, does it? – would you agree that profit is only one type of utility that a party can derive and that can make her seem unfair? An example would be the utility derived by a racist judge in sentencing African-American defendants. -do you think we can extend the reasoning to those who actually punish? For instance, there was a scandal in PA recently because a judge was corrupted by a company that runs juvenile detention centers to find more youth guilty. (see )

  • Erte Xiao 16 February 2011 (00:50)

    Hi, Hugo, thanks for your interesting comments. -I agree with you that in reality, punishment does not always perfectly correlated with norm violation (probably in most cases). It would be interesting to examine the outcome of punishment and the correlation of punishment and norm violation (or norm conformity). -That’s an interesting observation. Yes, there are different motives that might direct the enforcers/the judges to punish good behavior and thereby interfere with the norm communication function of punishment. Inspired by your comments, I’m wondering to what extent the outcome may be different depending on whether the punishers are seeking for monetary profit or non-monetary reward. -That’s a great example (which was actually cited in my earlier draft). In addition to the morality concern for privatizing prisons, I think my paper also raises the concern for the effectiveness of punishment when prisons become a revenue resources for the enforcers.