Wealth Redistribution and the Social Costs of Crime and Law Enforcement

Abstract

This paper explores how the distribution of wealth affects the social costs of crime and law enforcement and whether more or less equality, in this regard, is socially desirable. Generally, the optimal distribution of wealth should balance the social costs of enforcing the law upon wealthy individuals and those costs vis-a-vis poor individuals. The paper shows that, in a broad set of circumstances, greater or even perfect equality in the distribution of wealth is socially desirable. This is the case even though, as is assumed, the distribution of the benefits and harms resulting from harmful acts are the same for all individuals, all of whom also have identical and linear utility functions. However, there are certain circumstances under which inequality is socially preferable, circumstances that, all other things equal, are more likely to arise in poorer societies.