Agency problems in law enforcement: Theory and application to the U.S. Coast Guard

• 成果类型: Article
• 署名作者: Gawande, K; Bohara, AK
• 署名单位: Texas A&M University System; Texas A&M University College Station; Bush School of Government & Public Service; University of New Mexico
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1050.0422
• 发表日期: 2005
• 页码: 1593-1609
• 关键词: violations; optimal penalty; micropanel data; oil spills; public policy

摘要

We study two issues in the enforcement of public law. The first is whether the system of inspections and penalties set by the regulator is effective. The second is whether a better system of inspections and penalties can be designed, given the institutional constraints under which the regulator must function. We study these issues in the context of oil spill prevention activities of the U.S. Coast Guard (USCG), the agency entrusted with the enforcement of maritime pollution laws. A theoretically optimal contract that mixes penalties based on the amount of pollution ex post with penalties based on the extent of noncompliance ex ante is derived. The effectiveness of USCG inspections and penalties in reducing oil spills is then econometrically studied using microlevel data on a panel of U.S. flag tank vessels. Whether the optimal penalty can potentially improve the effectiveness of compliance inspections in reducing oil spills is examined in the light of the empirical results and recent developments in the economics and public management literature on effective incentive contracting. Among our findings is the potential for combining unilateral incentive-based methods with cooperative methods based on reciprocity to solve the complex problem of law enforcement.