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Law and Economics of Plea-Bargaining. Nuno Garoupa Universidade Nova de Lisboa & CEPR. Basic Idea.

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Law and Economics of Plea-Bargaining

Nuno Garoupa

Universidade Nova de Lisboa & CEPR

Paris 2005


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Basic Idea

  • Law and Economics of Plea-Bargaining: It is an efficient instrument of criminal procedure because it reduces enforcement costs (for both parties) and allows the prosecutor to concentrate on more meritorious cases.

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Basic Idea

  • Plea bargains are the criminal counterpart of civil settlements which Law and Economics has largely supported.

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Yet…

  • Plea-Bargaining is highly controversial in common law countries, including the US and the UK [England & Wales];

  • Plea-Bargaining has been transplanted to civil law (France, Italy, Poland, Argentina) under severe criticism by traditional doctrinal approaches and apparently without a major empirical success;

  • Informal versions have been observed in Germany, the Netherlands and elsewhere (includes summary procedures for those who do not contest guilt; unconditional and conditional dismissals; confession of guilt to get a reduction in the sentence, warnings and reprimands).

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Reality

  • 95% of all convictions in the US are secured with a guilty plea;

  • Widely used in the UK (around 90%);

  • 8% of all convictions in Italy.

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This paper

  • History of Plea-Bargaining: why?

  • Institutional details of Plea-Bargaining: what we mean by plea-bargaining.

  • Economics of Plea-Bargaining: state of the art.

  • Arguments against Plea-Bargaining.

  • Important differences between plea-bargaining across countries.

  • Sketch of a more comprehensive economic approach

  • Conclusion

  • References

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History of Plea-Bargaining

  • Historical justifications are obscure.

  • Reasons:

    • Bypass jury trials (US, England and Wales);

      • Why plea bargaining and not bench trials?

    • Workload (Italy, France, US, England and Wales);

    • Empower prosecution (France);

      • Against whom? Why?

        • Jury  back to bypass jury trials;

        • Judges  why not use stricter sentencing guidelines

    • Reduce costs for defendants;

      • Why not reform criminal procedure?

    • Lawyer domination of legal proceedings (common law countries)

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The case of the US

  • Dynamics in the 19th and early 20th century: All cases go to trial, explicit bargaining, implicit bargaining.

  • Introduction and existence of trial penalty by the end of 19th century.

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The case of the US

  • Why did judges allow it?

    • 1866 changes on rules of evidence to give defendants more rights at trial;

    • backlog of civil justice;

    • Rehabilitation approach to criminal law.

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The case of the US

  • Plea bargaining was one of several methods employed by Anglo-American administrators to dispose of criminal cases without juries. When compared with other modes to bypass trial by jury (e.g., bench trial), it is less distinctive and less American.

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The case of England & Wales

  • Formally introduced under the “plea before venue system” [Criminal Procedure and Investigations Act 1996];

  • Judicial precedent has created the one-third discount for guilty-pleas, incorporate into criminal law later [Criminal Justice and Public Order Act 1994], by now sentencing guidelines deal with it in detail [Criminal Justice Act 2003];

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The case of England & Wales

  • Indication of sentence by judge is now possible [CJA 2003];

    • Although there were some rules concerning the exchange of view between judge and defendant [Turner rules which delimited the judge’s role in pre-trial negotiations].

  • There are pre-trial hearings to facilitate exchange of information and bring about pleas of guilty;

  • There are several ways of “negotiated diversion.”

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The case of Italy(patteggiamento)

  • Italy – warrant a pretrial settlement opportunity to reduce delays, not to enhance prosecutorial discretion.

    • PROSECUTOR:

      • Less concentration of resources because it is usually after the preliminary investigations have taken place;

      • Applies only to minor offenses which do not justify an intensive use of resources;

      • Prosecutor incentives: seniority.

    • DEFENDANT:

      • Apply to a minor group of defendants, hence less attractive to accept;

      • Lots of acquittals for loss of evidence or witnesses and amnesties granted regularly

      • Delays make worthwhile to protract trials as long as possible to avoid jail

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The case of France(plaider coupable)

  • Similar to the Italian system.

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Institutional Details

What is Plea-Bargaining?

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Institutional Details

  • Charge bargaining:

    • Multiple charges: drop some in return for a plea of guilty to one of them;

    • Unique charge: drop a serious charge in exchange for a plea of guilty to a less serious charge.

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Institutional Details

  • Fact bargaining:

    • Agreement for a selective presentation of facts in return for a plea of guilty.

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Institutional Details

  • Specific fact bargaining:

    • Nolo Contendere Pleas: accepts a sanction without pleading guilty

    • Alford Pleas: accepts a sanction but defendant asserts innocence.

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Institutional Details

  • Plea Bargains: there is a specific discount for pleading guilty.

    • Plea before venue: the defendant is put to a decision in early stages;

    • In pre-trial hearings: the prosecutor and the defendant exchange information before bringing a plea bargain;

    • During the trial hearings (cracked trial due to late or delayed guilty plea).

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Institutional Details

  • Explicit Bargaining: Prosecutor makes a sentence recommendation; Judges indicate the sentence they are minded to impose.

  • Implicit Bargaining: Defendant pleads guilty, considering the existence of sentence discounts or the possibility of achieving a particular sentence.

  • Negotiated Diversions: Warnings and reprimands in return for some restitution.

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Economics of Plea Bargaining

Optimism of Economics with respect to Plea-Bargaining

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Economics of Plea Bargaining

  • Part of efficient criminal procedure because reduces costs and allows prosecutor to allocate resources more effectively.

  • Part of efficient law enforcement (social welfare maximizing) because reduces costs and uncertainty.

  • Plea-Bargaining is efficient because it is just like discretion in a regulatory proceeding.

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Economics of Plea Bargaining

  • Plea Bargaining provides

    • consistent signals that can enhance prosecutorial decisions.

    • for efficient screening of cases.

    • for efficient decision to stand trial.

    • consistency with the low-probability high-penalty enforcement strategy.

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Economics of Plea-Bargaining

  • Plea-Bargaining should be perceived and enforced as a contract between two parties and therefore it should enhance social welfare if voluntarily performed.

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Economics of Plea Bargaining

  • Criminal defense expenditures result in lower expected penalties for the innocent at trial than the guilty and they help ensure that plea bargaining efficiently screens defendants.

  • A plea bargain might give the lowest penalty to the most culpable defendant if increases the probability of conviction of conspirators.

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Economics of Plea Bargaining

  • Plea-Bargaining helps enforcement agencies getting information for criminal convictions.

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Economics of Plea-Bargaining

Minor Criticism of Economics against Plea-Bargaining

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Economics of Plea-Bargaining

  • There is a possibility that plea bargaining might dilute deterrence;

  • Hence, the efficiency depends on the objectives of prosecutors: Ex post objectives of prosecutors should determine ex ante criminal policies of legislator.

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Economics of Plea-Bargaining

  • Increased sanctions can lead criminals to substitute between offenses and thus more severe crime.

  • Use of plea bargain is determined by increasing trial costs and binding budgets, not social welfare.

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Economics of Plea-Bargaining

  • Due to different prosecutorial objectives, plea bargaining increase social welfare in adversarial systems but not in inquisitorial.

  • Judicial discretion affects the decision of granting plea bargain.

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Economics of Plea-Bargaining

Summary of Economics of Plea Bargaining

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Economics of Plea-Bargaining

  • Summary:

    (1) Economics is quite positive about it;

    (2) Relies on prosecutorial discretion being efficient;

    (3) Downplays the role of judges.

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Arguments against Plea-Bargaining

  • Plea-Bargaining is a disaster in criminal procedure

    • Criminals receive undeserved leniency;

    • Undermines procedural guarantees for the accused (constitutional issue);

    • Hurts the innocent;

    • Unfair bargains;

    • Strategic choice of moment to bring plea-bargaining;

    • Other questions.

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Arguments against Plea-Bargaining

Inadequate and Undeserved Leniency

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Arguments against Plea-Bargaining

  • Undermines:

    • Retribution;

    • Deterrence;

    • Sentencing proportionality.

  • But usually does not look at the low probability of punishment.

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Arguments against Plea-Bargaining

Undermines procedural guarantees for the accused

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Arguments against Plea-Bargaining

  • The unavailability of the guilty plea is regarded as a guarantee of defendants’ rights:

    • Presumption of innocence;

    • Right to examine witnesses against the accused;

    • Right to a fair and public hearing;

    • It is controversial if compatible with ECHR.

Paris 2005


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Arguments against Plea-Bargaining

  • Discount for pleading guilty:

    • Imposes a penalty on the right to be trialed;

    • Penalizes those who exercise the right to presumption of innocence;

    • It induces self-incrimination.

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Arguments against Plea-Bargaining

  • Prosecutors face pressure for convictions and plea-bargaining is a mechanism to get them at the expense of procedural guarantees: “batting” effect.

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Defense of Plea-Bargaining

  • All these rights and privileges are derogable if the defendant wishes so…

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Arguments against Plea-Bargaining

Hurts the innocent

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Arguments against Plea-Bargaining

  • Selection of cases has two implications: (i) innocents stand trial more frequently; (ii) there is pressure for innocents to plead guilty.

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Defense of Plea-Bargaining

  • Selection of cases mirrors the usual problem of type I (acquit the guilty) and type II errors (convict the innocent).

Paris 2005


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Defense of Plea-Bargaining

  • Innocent defendants will be induced to plead guilty:

    • As long as the probability of conviction is positively correlated with the probability of guilt, the selection-of-cases effect implies a reduced number of innocent defendants.

    • The reason is that prosecutorial discretion is not unconstrained. Hence, even if there is an incentive to offer a plea to low probability convictions, prosecutors have to (i) select cases under a fixed budget; (ii) cannot offer unlimited sentence discounts; (iii) cannot control extra legal sanctions triggered by guilty pleas.

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Arguments against Plea-Bargaining

Unfair bargains

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Arguments against Plea-Bargaining

  • Plea-bargains can be unfair and favor the wealthy;

  • Plea bargains are not civil settlements because they not care only about (i) strength of evidence and (ii) expected punishment after trial. There are important factors such as psychological bias and structural forces (lawyer quality, agency costs, bail and detention, rules, sentencing guidelines and statutes) that produce skewed bargains..

Paris 2005


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Arguments against Plea-Bargaining

  • Plea-bargains cannot be seen as voluntary contracts because the affected parties lack the incentive to assure public interest in effective law enforcement and deny defendants a bargaining position to guarantee fair exchange.

Paris 2005


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Defense of Plea-Bargaining

  • Judicial intervention to avoid exceedingly lenient plea bargains. It is true that the economic theory says that one should accept plea bargains without judicial review because they allow an efficient use of prosecutorial resources. Plea bargaining with judicial review could be better because (i) avoid dilution of deterrence; (ii) reduces the risk of wrongful convictions.

  • By hindering the prosecutor’s ability to agree to exceedingly lenient sentences, courts increase the cost of handling weak cases without obstructing the prosecutor’s ability to settle stronger cases.

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Arguments against Plea-Bargaining

Strategic choice of moment to bring plea-bargaining

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Arguments against Plea-Bargaining

  • Choosing the moment for plea-bargaining:

    • Strategic management of information by both sides (rules of discovery);

    • The reputation of the judge or the jury;

    • Regulation of legal framework: judicial review.

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Arguments against Plea-Bargaining

Other Questions

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Arguments against Plea-Bargaining

  • There might be overcharging in order to put pressure for pleading guilty.

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Defense of Plea-Bargaining

  • The effect cannot be so dramatic because there are two signals (for prosecutor and for jury) and both are correlated with guilt. Hence, the result will depend very much on the rules of discovery.

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Arguments against Plea-Bargaining

  • Questions concerning uncertainty:

    • Plea bargains can only help risk-averse defendant, guilty or innocent. Efficient if we believe that innocent individuals are systematically more risk averse than guilty individuals.

    • Uncertainty concerning the benchmark sentence.

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Defense of Plea-Bargaining

  • If we allow only fixed discounts, they may partially solve the problems with respect to uncertainty.

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Institutional Differences in Plea-Bargaining

  • Procedure:

    • Adversarial vs. inquisitorial criminal procedure;

    • Mandatory prosecution;

    • Judicial review;

    • Prosecutorial guidelines;

    • Rules of evidence.

  • Sentencing:

    • Guidelines;

    • Prosecutorial proposed sentencing;

    • Judicial pre-commitment to sentencing;

  • Professions:

    • Judges;

    • Prosecutors;

    • Defense Lawyers.

Paris 2005


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A More Comprehensive Economic Analysis

  • Asymmetry of information: sentencing benchmark.

  • Defendant’s side: lawyer (agency costs).

  • Prosecutor’s side: objectives (structure of profession)

  • Third party effects

    • Victims (retribution vs. secondary victimization);

    • Judge (active vs. passive judicial review);

    • Social welfare: deterrence, sentencing proportionality.

  • Timing

    • Rules of evidence;

    • Sunk vs. saving costs.

Paris 2005


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Conclusion

  • The Economics of Plea-Bargaining has largely failed to assess institutional details (charge, fact and plea bargaining).

  • Its over-optimism only recently has been confronted with the arguments against it.

  • Still relies heavily on the “efficient prosecutor” model.

  • Only recently has started looking at the possible advantages of judicial review.

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Conclusion

  • The Economics of Plea-Bargaining has largely failed to influence the debate in Europe.

  • It was unable to predict the relative failure of Italy (and possibly France):

    • Although we do have ex post rationalization (bargaining as a solution to delays in trial rather than prosecutorial efficient allocation of resources).

Paris 2005


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References (I)

  • Richard Adelstein and Thomas J. Miceli, 2001,Toward a Comparative Economics of Plea Bargaining, EJLE.

  • Albert W. Alschuler, 1968, The Prosecutor’s Role in Plea Bargaining, U Chicago LR .

  • Albert W. Alschuler, 1976, The Trial Judge’s Role in Plea Bargaining, Columbia LR .

  • Albert W. Alschuler, 1981, The Changing Plea Bargaining Debate, California LR.

  • Albert W. Alschuler, 1983, Implementing the Criminal Defendant’s Right to Trial, U Chicago LR.

  • Andrew Ashworth and Mike Redmayne, 2005, The Criminal Process, 3rd edition, Oxford University Press.

  • Scott Baker and Claudio Mezzeti, 2001, Prosecutorial Resources, Plea-Bargaining, and the Decision to Go to Trial, JLEO.

  • Oren Bar-Gill and Oren Gazal, 2005, Plea Bargains Only for the Guilty, JLE.

  • Stephanos Bibas, 2003, Harmonizing Substantive-Criminal-Law Values and Criminal Procedure: The Case of Alford and Nolo Contendere Pleas, Cornell LR.

Paris 2005


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References (II)

  • Stephanos Bibas, 2004, Plea Bargaining Outside the Shadow of Trial, Harvard LR.

  • David Bjerk, 2004, Guilt Shall Not Escape Nor Innocence Suffer: A Theory of Optimal Prosecutor Behavior when Defendant Guilt is Uncertain.

  • Nicola Boari and Gianluca Fiorentini, 2001, An Economic Analysis of Plea Bargaining: The Incentives of the Parties in a Mixed Penal System, IRLE.

  • Thomas W. Church, 1979, In Defence of Bargain Justice, Law and Society Review

  • C Y Cyrus Chui, 1990, Plea Bargaining with the IRS, J Pub Econ.

  • Penny Darbyshire, 2000, The Mischief of Plea-Bargaining and Sentencing Rewards, Criminal Law Review.

  • Frank Easterbrook, 1983, Criminal Procedure as a Market System, JLS.

  • M. Feeley, 1997, Legal Complexity and the Transformation of the Criminal Process: the Origins of Plea Bargaining, Israel LR.

  • George Fisher, Plea Bargaining’s Triumph: A History of Plea Bargaining in America, 2003, Stanford CA: Stanford University Press.

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References (III)

  • Oren Gazal, 2005, Screening, Plea Bargains and the Innocent Problem.

  • D. G. Gifford, 1983, Meaningful Reform of Plea-Bargaining: The Control of Prosecutorial Discretion, U Illinois LR.

  • E. Grande, 2000, Italian Criminal Justice: Borrowing and Resistance, American Journal of Comparative Law.

  • Gene M. Grossman and Michael L. Katz, 1983, Plea Bargaining and Social Welfare, AER.

  • D. D. Guidorizzi, 1998, Should we Really Ban Plea Bargaining? The Core Concerns of Plea Bargaining Critics, Emory LJ.

  • R. Heller, 1997, Selective Prosecution and the Federalization of Criminal Law: The Need for Meaningful Judicial Review of Prosecutorial Discretion, U Penn LR.

  • R. Henham, 1999, Bargain Justice or Justice Denied? Sentence Discounts and the Criminal Process, Modern Law Review.

  • J. Herrmann, 1992, Bargaining Justice: A Bargain for German Criminal Justice, U Pittsburgh LR.

  • John J. Jackson, 2005, The Effect of Human Rights on Criminal Evidentiary Processes: Towards Convergence, Divergence, or Realignment?, Modern Law Review.

  • H. Jung, 1997, Plea-Bargaining and its Repercussions on the Theory of Criminal Procedure, European J of Crime, Criminal Law and Criminal Justice.

  • Bruce Kobayashi, 1992, Deterrence with Multiple Defendants: An Explanation for Unfair Plea Bargains, RAND J Econ.

Paris 2005


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References (IV)

  • Bruce Kobayashi and John Lott, 1992, Low-Probability-High-Penalty Enforcement Strategies and the Efficient Operation of the Plea-Bargaining System, IRLE.

  • Bruce Kobayashi and John Lott, 1996, In Defense of Criminal Defense Expenditures and Plea Bargaining, IRLE.

  • Maximo Langer, 2004, From Legal Transplants to Legal Translations: The Globalization of Plea-Bargaining and the Americanization Thesis in Criminal Procedure, Harvard International LJ.

  • Yue Ma, 2002, Plea-Bargaining and Prosecutorial Discretion in the United States, France, Germany, and Italian: A Comparative Perspective, International Criminal Justice Review.

  • Thomas J. Miceli, 1996, Plea Bargaining and Deterrence: An Institutional Approach, EJLE.

  • Jennifer F. Reinganum, 1988, Plea Bargaining and Prosecutorial Discretion, AER.

  • Jennifer F. Reinganum, 2000, Sentencing Guidelines, Judicial Discretion and Plea Bargaining, RAND J Econ.

  • Joanne Roberts, 2002, Plea Bargaining with Budgetary Constraints and Deterrence.

  • Stephen J. Schulhofer, 1984, Is Plea-Bargaining Inevitable?, Harvard LR.

  • Stephen J. Schulhofer, 1988, Criminal Justice Discretion as a Regulatory System, JLS.

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References (V)

  • Stephen J. Schulhofer, 1992, Plea Bargaining as Disaster, Yale LJ.

  • Stephen J. Schulhofer and I. Nagel, 1997, Plea Negotiations under Federal Sentencing Guidelines: Guideline Circumvention and its Dynamics in the Post-Mistretta Period, Northwestern ULR.

  • Robert E. Scott and William J. Stuntz, 1992, Plea Bargaining as Contract, Yale LJ.

  • Robert E. Scott and William J. Stuntz, 1992, A Reply: Imperfect Bargains, Imperfect Trials, and Innocent Defendants, Yale LJ.

  • Bruce P. Smith, 2005, Plea Bargaining and the Eclipse of Jury, Annual Review of Law and Social Science.

  • Ronald Wright and Marc Miller, 2002, The Screening/Bargaining Trade-Off, Stanford LR.

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