According to Becker it is best to use very high fines and low inspection probabilities to deter traffic accidents because inspection is costly. This paper uses a political economy model to analyse the choice of the fine and the inspection probability. There are two lobby groups: the vulnerable road users and the ‘strong’ road users. If only vulnerable road users are effective in lobbying, the authors find that the expected fine is higher than if only the interests of car drivers are taken into account. When the choice between inspection probability is considered and the magnitude of the fine for a given expected fine, the authors find that the fine preferred by the vulnerable road users is higher than socially optimal. The reverse holds if only the car drivers are effective lobbyists. The orders of magnitude are illustrated numerically for speeding and contrasted with current fines for drunk driving in the European Union. (Author/publisher)
Abstract