By Ian Ayres, Joseph Bankman, & Daniel J. Hemel

The negative moral emotions of guilt and shame impose real social costs but also create opportunities for policymakers to engender compliance with legal rules in a cost-effective manner. We present a unified model of guilt and shame that demonstrates how legal policymakers can harness negative moral emotions to increase social welfare. The prospect of guilt and shame can deter individuals from violating moral norms and legal rules, thereby substituting for the expense of state enforcement. But when legal rules and law enforcement fail to induce total compliance, guilt and shame experienced by noncompliers can increase the law’s social costs. We identify specific circumstances in which rescinding a legal rule will improve social welfare because eliminating the rule reduces the moral costs of noncompliance with the law’s command. We also identify other instances in which moral costs strengthen the case for enacting legal rules and investing additional resources in enforcement because deterrence reduces the negative emotions experienced by noncompliers. We end by exploring the implications of our framework for legal policy across “guilt cultures” and “shame cultures,” for the debate over shaming sanctions, and for other moral emotions such as resentment and virtue.

University of Chicago Law Review (forthcoming), Yale Law & Economics Research Paper, Stanford Law and Economics Olin Working Paper No. 601,