Optimization of offenses level and their deterrence function: economic approach

Economic Annals-ХХI: Volume 142, Issue 7-8(1), Pages: 20-23

Citation information:
Reikin, V. (2014). Optimization of offenses level and their deterrence function: economic approach. Economic Annals-XXI, 7-8(1), 20-23. https://ea21journal.world/index.php/ea-v142-05/

Vitalii Reikin
PhD (Economics),
Associate Professor,
Lutsk Institute of Open International University of Human Development «Ukraine»
2/19 Shchusev Str., Lutsk, 43020, Ukraine
Vitaliyreikin@gmail.com

Optimization of offenses level and their deterrence function: economic approach

Abstract. Whereas elimination of shadow activity is impossible, there is the problem of setting the limits of offenses deterrence overall level, which minimizes the total costs for society and preventive costs for their avoidance. The purpose of the article is further development of theoretical basis of regulating and controlling the shadow sphere according to economic theory of offenses based at G. Becker approach. The optimal range of offenses can’t be always closer to zero. The deterrence function is analyzed by impacting on indicators of probable revealing offenses and the level of their punishment. According to other scientists’ empirical studies, it is demonstrated that more effectively to deter offenses by increasing probability of their revealing than to increase the punishment. Two regulative factors are interchangeable: minor penalties with high probability of offenses deterrence have the same deterrent effect as the severe punishment with low probability of detection and punishment of the offender. The locality of punishment deterrence effect is grounded by self-seeking offenses. Punishment dilemma remains still unresolved: it is necessary to find methods of law enforcement, which would provide the society with a certain balance between economic efficiency and social justice.

Keywords: Offenses; Optimization; Deterrence; Social Costs; Shadow Economy

JEL Classіfіcatіon: B22; E60; N10

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Received 04.06.2014