The Elusive Deterrence of Corporate Crime

• Date: 01 May 2016
• Author: Peter Cleary Yeager
• DOI: http://doi.org/10.1111/1745-9133.12201
• Published date: 01 May 2016

POLICY ESSAY

CORPORATE CRIME DETERRENCE

The Elusive Deterrence of Corporate Crime

Peter Cleary Yeager

Boston University

Given the high manifest costs of corporate crime—to say nothing of its less ap-

parent ones1—it should be surprising how little we know scientifically (hence,

confidently) about how best to deter or limit it. As an idea, the concept of deter-

rence is straightforward: Unwanted behaviors can be reduced in number if the costs of the

acts are greater than their benefits, assuming that the decision maker is rational and the costs

are imposed reliably and swiftly.And it has long been conventionally thought that corporate

crimes should be among the most deterrable offenses because corporations are designed as

quintessentially rational organizations built to pursue the highest gains (profits and market

share) and to minimize their costs in the pursuit. Moreover, corporate executives should be

especially sensitive to punishment threats from fear of losing their high status, income, and

reputations.

Although corporate behavior is certainly oriented to perceived risks and rewards, it

is less sensitive to the law’s conventional sanctioning threats than the classic model of

deterrence would suggest (Simpson, 2002; Yeager, 2007), a point first detailed by the

legal scholar Christopher Stone in his book, Where the Law Ends (1975). In that classic

text, he outlined a central irony: The complexities of a corporate organization put more

responsibility on the law to limit business crimes than it bears for conventional crimes,2

while making it more difficult for the law to meet this burden (Yeager, 2016). I shall have

more to say about this dynamic in the following pages.

Direct correspondence to Peter Cleary Yeager, 24 Crestwood Drive, Framingham, MA 01701 (e-mail:

pcyeager@bu.edu).

1. Although we can obtain plausible dollar estimates of the costs of some types of corporate crimes, such

as securities fraud, tax fraud, and some antitrust violations, it is another matter altogether to measure

the financial, human, and social costs of such offenses as deadly industrial accidents, massive oil spills,

chronic air and water pollution violations, and the pattern of fraud that contributed importantly to the

economic crisis of 2008. And even plausible dollar estimates discount the human anguish and other

social costs that often follow from corporate victimizations.

2. This point has to do with the often muted role of individual consciences in complex organizational

settings.

DOI:10.1111/1745-9133.12201 C2016 American Society of Criminology 439

Criminology & Public Policy rVolume 15 rIssue 2