The fairness of sanctions: some implications for optimal enforcement policy

In this article we incorporate notions of the fairness of sanctionsinto the standard model of public enforcement. When both theprobability and magnitude of sanctions may be varied, the usualsolution involves a very high sanction and a relatively lowprobability of enforcement if individuals are risk neutral.When the issue of fairness is added to the analysis, the optimalsanction generally is not extremely high because such a sanctionwould be seen as unfair. The optimal probability of imposingsanctions may be higher than in the usual case (to offset thelower sanction) or lower than in the usual case (because thelower sanction reduces the effectiveness of enforcement).