We show in this paper that efficiency requires that fines be used to the maximum extent possible relative to increased enforcement. While there is a political limit to how far this process should be pushed, in times of budget stress there could be justification for increased reliance on fines...

A model of the optimal speed limit is developed which explicitly recognizes the role of average speed, speed variance, and the level of enforcement. An unusual result emerges, namely that a higher speed limit may be optimal when reducing the variance in highway speeds reduces accident externalities