Profit-Seeking Punishment Corrupts Norm Obedience
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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