Punish Once or Punish Twice: A Theory of the Use of Criminal Sanctions in

Though clearly distinct in nature and procedure, both Regulatory Agencies and Courts frequently rely on similar instruments to sanc- tion the same or very similar kinds of illegal behavior. In this paper, we develop a theory of the use of criminal sanctions in addition to regulatory penalties. We show that it is generally more effective to have a penalty imposed by a Regulatory Agency rather than by the Courts. We extend our analysis by considering imprisonment sen- tences, legal error, and collusion between a Regulatory Agency and an offender. We claim that regulatory penalties become less effective in these contexts. The objective of the paper, though, is not limited to the determination of the theoretical conditions that can make the use of both sanctioning schemes optimal. Our analysis is also relevant to the application of a specific legal doctrine, the Double Jeopardy clause.