Public and Private Enforcement of Law Under the High Risk of Type I Errors: the Russian Case
Abstract: The paper considers private and social costs and benefits of selective public enforcement of law (enforcement by public authority upon complaints of private parties) in comparison with private and pure public enforcement. The theoretical framework developed reflects the specific features of Russian system of law enforcement. Under certain conditions (no compensation of damages and low cost of complaint to public authority) selective public enforcement is privately desirable. Selective public enforcement underperforms both private and ‘pure’ public enforcement if acting upon complaints of interested parties increases the probability of Type I errors and selected for investigation cases are skewed towards violations those induce private harm in contrast to violations reducing social welfare. Conclusions on private choice of enforcement models are supported by the evidence on the enforcement of three branches of civil law in Russia, where private and public enforcement systems compete and selective enforcement is supported by the public agencies. Consumer protection law and labor law are the examples of legislations where private enforcement both provides potentially higher deterrence than public enforcement and reveals to be privately preferable. In contrast, antitrust law is an example of legislation where private enforcement is completely crowded out by formally public enforcement and ‘pure’ public enforcement protecting social welfare is largely replaced by selective public enforcement preventing harm on private parties.
