A recent viral tweet, quoted by Elon Musk, points out that bartenders can be fined or even imprisoned if they serve alcohol to patrons who later kill someone while under the influence. Judges, in contrast, enjoy absolute or qualified immunity even when they repeatedly release defendants who go on to kill.

I agree that judges should face stronger incentives to make good decisions, but the obvious problem with penalizing judges who release people who later commit crimes is that judges would then have very little incentive to release anyone—and that too is a bad decision. Steven Landsburg solved this problem in his paper A Modest Proposal to Improve Judicial Incentives, published in my book Entrepreneurial Economics.

Landsburg’s solution is elegant: we must also pay judges a bounty when they release a defendant.

Whether judges would release more or fewer defendants than they do today would depend on the size of the cash bounty, which could be adjusted to reflect the wishes of the legislature. The advantage of my proposal is not its effect on the number of defendants who are granted bail but the effect on which defendants are granted bail. Whether we favor releasing 1 percent or 99 percent, we can agree that those 1 percent or 99 percent should not be chosen randomly. We want judges to focus their full attention on the potential costs of their decisions, and personal liability has a way of concentrating the mind.

One might object that a cash bounty will cost too much, but recall that the bounty is balanced by penalties when a released defendant commits a future crime. The bounties and penalties can be calibrated so that on average the program is budget-neutral. The key is to get the incentives right on the margin.

The structure of this problem is quite general. Ben Golub, for example, writes:

There should be a retrospective reputational penalty imposed on referees who vote no on a paper because the paper is too simple technically — if that paper ends up being important. It’s an almost definitional indicator of bad judgment.

Quite right, but a penalty for rejection needs to be balanced with a bonus for acceptance. Get the marginal incentive right and quality will follow!