Chapter 6 The Theory of Public Enforcement of Law This chapter surveys the theory of the public enforcement of law—the use of governmental agents (regulators inspectors tax auditors police prosecutors) to detect and to sanction violators of legal rules. The theoretical core of the analysis addresses the following basic questions: Should the form of the sanction imposed on a liable party be a fine an imprisonment term or a combination of the two Should the rule of liability be strict or fault based If violators are caught only with a probability how should the level of the sanction be adjusted How much of societys resources should be devoted to apprehending violators A variety of extensions of the central theory are then examined including: activity level; errors; the costs of imposing fines; general enforcement; marginal deterrence; the principal agent relationship; settlements; self reporting; repeat offenders; imperfect knowledge about the probability and magnitude of sanctions; corruption; incapacitation; costly observation of wealth; social norms; and the fairness of sanctions.