When Punishers Profit, People are More Likely to Break the Rules
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| UC SD Study shows Police for Profit Erodes Trust |
When Enforcers Profit from Punishment, Society Pays the Price
New UC San Diego research reveals how profit-driven enforcement undermines cooperation and trust, challenging fundamental assumptions about criminal justice policy
Study has major implications for civil asset forfeiture, for-profit prisons, and quota-based policing
A groundbreaking study from the University of California San Diego has revealed a troubling paradox at the heart of law enforcement: when those who punish others stand to profit from doing so, it actually makes everyone less likely to cooperate and follow the rules.
Published in the Proceedings of the National Academy of Sciences, the research by UC San Diego Rady School of Management Assistant Professor Tage Rai and doctoral student Raihan Alam demonstrates that profitable punishment destroys the very social cooperation it's meant to protect. The findings have profound implications for controversial criminal justice practices including civil asset forfeiture, for-profit prisons, and police quotas.
Trust Erodes When Punishment Becomes Business
Using economic experiments with over 4,000 participants, the researchers found that when "punishers" received financial bonuses for penalizing rule-breakers, cooperation rates plummeted across the board—even among those who would benefit from working together.
"When punishment was profitable, people were less likely to cooperate from the start," said co-author Alam. "Decision makers were more likely to act in their own self-interest, viewing the situation not as a social interaction about fairness, but as a game of maximizing profits."
The study adds a crucial twist to classic behavioral research, which has long suggested that punishment increases cooperation in societies. But Rai and Alam's work reveals this only holds true when punishers are seen as acting from moral motivations rather than financial self-interest.
"Punishment only works as a social signal if people believe it's being done for the right reasons," Rai explained. "But when the enforcer may be acting out of self-interest, trust breaks down and punishment backfires."
Real-World Applications: From Asset Forfeiture to Private Prisons
The research couldn't be more timely, as debates rage over several profit-driven enforcement mechanisms currently embedded in the U.S. criminal justice system:
Growth in CAF Revenue leveled off in 2015
Civil Asset Forfeiture Under Scrutiny
Civil asset forfeiture—which allows law enforcement to seize property suspected of being connected to criminal activity without charging owners with crimes—has become a multi-billion dollar enterprise. Federal Asset Forfeiture Fund deposits grew from $93.7 million in 1986 to over $2 billion annually by 2019.
Recent congressional efforts, including the bipartisan FAIR Act introduced by Senators Cory Booker and Rand Paul, aim to reform these practices. "Civil asset forfeiture allows federal law enforcement to seize the property of Americans who haven't even been charged with or convicted of a crime," Senator Booker noted.
The UC San Diego findings suggest that when law enforcement can profit from seizures, it may fundamentally alter how communities perceive the legitimacy of enforcement actions.
For-Profit Prison Industry Expansion
As of 2022, 90,873 people were housed in private prisons across 27 states and the federal system, representing 8% of the total prison population. Private prison companies average over $300 million in profits annually, raising concerns about incentives when incarceration becomes profitable.
The industry's financial stakes in mass incarceration became evident when "stock prices of the country's two largest publicly traded companies that own and manage prisons and immigrant detention centers soared immediately following Donald Trump's election as president".
The Science Behind Cooperation's Collapse
The UC San Diego study built on previous research by Rai that examined how material incentives crowd out moral motivations for punishment. In earlier work published in Psychological Science, Rai found that "providing a monetary bonus for punishing a third party cut participants' willingness to do so nearly in half" when people anticipated social condemnation for profiting from punishment.
The new research goes further, showing that profitable punishment doesn't just reduce the punisher's willingness to act—it fundamentally changes how entire communities view the enforcement system.
Even when researchers optimized conditions so punishment only targeted genuinely selfish behavior, cooperation failed to recover, suggesting the initial damage to trust persisted throughout the interaction.
Perspective Matters: Risk Changes Everything
Perhaps most striking was the study's finding that people's attitudes toward punishment shifted dramatically based on whether they saw themselves as potential targets. When participants viewed enforcement from a distance—seeing others as the ones who might be punished—they supported harsher penalties even when punishers profited. But when they imagined themselves as potential targets, they became far more skeptical of enforcers' motives.
"Even when we told participants that punishers were being paid, those who weren't at risk still believed harsher punishment would boost cooperation," Rai observed. "They trusted the punishers too much and failed to consider how it might feel to be on the receiving end."
Supporting Evidence: When Frequency Trumps Severity
The UC San Diego findings align with a growing body of research challenging traditional "tough on crime" approaches. A 2021 study in the Proceedings of the National Academy of Sciences found "robust evidence for the greater effectiveness of frequent small punishments over rare severe punishments in reducing violations".
Research consistently shows that harsh sentences don't deter crime effectively. The National Institute of Justice concluded in 2016 that "prison sentences—and long sentences in particular—do little to deter future crime," with incarceration having either no effect or "a mildly criminogenic impact" on future lawbreaking.
Reform Movements Gain Momentum
The research comes as reform efforts accelerate across multiple fronts:
Since 2014, 37 states and the District of Columbia have reformed civil forfeiture laws, with 16 states now requiring criminal convictions to forfeit most types of property.
At the federal level, Congresswoman Bonnie Watson Coleman reintroduced the End For-Profit Prisons Act of 2025, which would phase out Bureau of Prisons and U.S. Marshals Service contracts with private prison companies.
Meanwhile, states are implementing various criminal justice reforms, from overdose prevention sites to enhanced due process protections in asset forfeiture cases.
The Path Forward: Rebuilding Trust
Rai emphasizes that changing outcomes isn't enough—reform requires signaling proper intent.
"Even perfect enforcement doesn't work if the underlying trust isn't there," he said. "You need structural reforms that clearly and publicly remove profit motives from punishment. People need to see—and believe—that enforcers are acting morally, not opportunistically."
The study suggests this could mean eliminating quota systems, ending problematic civil asset forfeiture practices, or banning for-profit incarceration entirely. But more fundamentally, it may require rethinking punishment's role in society.
"When people don't trust the institutions that punish them, they're less likely to follow the rules," Rai concluded. "Trust—not punishment—is the foundation of any cooperative society."
Implications for Policy Makers
The research provides empirical support for what many communities affected by aggressive enforcement have long argued: that profit-driven punishment erodes rather than enhances public safety. As policymakers continue debating criminal justice reform, this work suggests that addressing financial incentives in law enforcement may be crucial for rebuilding community trust and cooperation.
The study also helps explain why "tough on crime" policies often fail to deliver promised results, particularly in communities where trust in authorities is already strained. By demonstrating how profit motives can undermine enforcement legitimacy, the research offers a scientific foundation for advocates pushing toward more equitable and effective approaches to public safety.
Sources
- Rai, T. S., & Alam, R. (2025). Profitable Third-Party Punishment Destabilizes Cooperation. Proceedings of the National Academy of Sciences. University of California San Diego. https://today.ucsd.edu/story/when-punishers-profit-people-are-more-likely-to-break-the-rules
- Rai, T. S. (2022). Material benefits crowd out moralistic punishment. Psychological Science, 33, 789-797. https://journals.sagepub.com/doi/abs/10.1177/09567976211054786
- Mears, D. P., & Stafford, M. C. (2025). Gauging the totality of criminal legal sanctions and punishment: Implications for research and policy on retribution and deterrence. Punishment & Society. https://journals.sagepub.com/doi/10.1177/14624745251344576
- Teodorescu, K., et al. (2021). Frequency of enforcement is more important than the severity of punishment in reducing violation behaviors. Proceedings of the National Academy of Sciences, 118(42), e2108507118. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8545445/
- Budd, K. M. (2024, February 21). Private Prisons in the United States. The Sentencing Project. https://www.sentencingproject.org/reports/private-prisons-in-the-united-states/
- Sawyer, W., & Wagner, P. (2025, March 11). Mass Incarceration: The Whole Pie 2025. Prison Policy Initiative. https://www.prisonpolicy.org/reports/pie2025.html
- Prison Policy Initiative. (2025). Winnable criminal justice reforms in 2025. https://www.prisonpolicy.org/reports/winnable2025.html
- Walberg, T. (2023). Civil Asset Forfeiture Reform. U.S. House of Representatives. https://walberg.house.gov/civil-asset-forfeiture-reform
- Booker, C., & Paul, R. (2025). Booker, Paul Introduce Bipartisan FAIR Act to Reform Civil Forfeiture Laws, Protect Americans' Rights. U.S. Senate. https://www.booker.senate.gov/news/press/booker-paul-introduce-bipartisan-fair-act-to-reform-civil-forfeiture-laws-protect-americans-rights
- Watson Coleman, B. (2025). Rep. Watson Coleman Reintroduces End For-Profit Prisons Act. U.S. House of Representatives. https://watsoncoleman.house.gov/newsroom/press-releases/rep-watson-coleman-reintroduces-end-for-profit-prisons-act
- Eisen, L. B. (2025). What Trump's Victory Means for the Private Prison Industry. Brennan Center for Justice. https://www.brennancenter.org/our-work/analysis-opinion/what-trumps-victory-means-private-prison-industry
- Williams, K. (2024, May 9). Williams Bill Would Reform Civil Asset Forfeiture Process in Delaware. Delaware House Democrats. https://housedems.delaware.gov/2024/05/09/williams-bill-would-reform-civil-asset-forfeiture-process-in-delaware/
- Institute for Justice. (2023, August 4). Civil Forfeiture Reforms on the State Level. https://ij.org/legislative-advocacy/civil-forfeiture-legislative-highlights/
- Cornell Law School. (2025). Civil forfeiture. Legal Information Institute. https://www.law.cornell.edu/wex/civil_forfeiture
- Municipal Research and Services Center. (2025, July). More Process and Proof: 2025 Legislative Changes to Civil Asset Forfeiture Procedures. https://mrsc.org/stay-informed/mrsc-insight/july-2025/civil-asset-forfeiture-changes
- When Punishers Profit, People are More Likely to Break the Rules
The complete study, "Profitable Third-Party Punishment Destabilizes Cooperation," is available in the Proceedings of the National Academy of Sciences.
When Punishment Pays: The Psychology Behind Society's Trust Crisis
New research reveals how profit motives in law enforcement trigger deep psychological responses that undermine the very cooperation they're meant to protect.
Understanding why "tough on crime" policies often backfire—and what it means for rebuilding social trust
KEY TAKEAWAYS:
- When enforcers profit from punishment, people's trust in the system collapses
- This psychological shift makes everyone less likely to cooperate, even rule-followers
- The damage persists even when enforcement targets genuine wrongdoing
- Understanding these dynamics is crucial for effective criminal justice reform
Have you ever wondered why harsh "law and order" policies often seem to make communities less safe rather than more? Or why people in certain neighborhoods view police with deep suspicion, even when they desperately want protection from crime?
Groundbreaking research from UC San Diego provides a psychological explanation for these puzzling phenomena—and the answer lies in a fundamental aspect of human nature that policymakers have largely ignored.
The Trust Equation
At the heart of social cooperation lies a simple but powerful psychological principle: we follow rules when we believe the enforcers are acting from genuine moral concern, not self-interest. When that belief breaks down, so does our willingness to play by society's rules.
Tage Rai, an assistant professor of psychology at UC San Diego's Rady School of Management, and doctoral student Raihan Alam have documented this dynamic in a series of experiments published in the Proceedings of the National Academy of Sciences. Their findings challenge decades of assumptions about deterrence and reveal why profit-driven enforcement often backfires spectacularly.
"People have an intuitive sense of when punishment is legitimate," explains Rai. "When they suspect the punisher is acting out of self-interest rather than genuine concern for justice, they withdraw their cooperation—not just from the specific enforcer, but from the entire system."
How the Mind Processes Punishment
The research builds on earlier work by Rai showing that people often hurt others not for material gain, but to signal their own moral virtue. This "moralistic punishment" serves a crucial social function: it communicates shared values and reinforces community standards.
But when punishment becomes profitable, it corrupts this psychological signal. Instead of communicating moral concern, profitable punishment suggests the enforcer is motivated by greed. This shift fundamentally alters how observers interpret and respond to enforcement actions.
In economic game experiments involving over 4,000 participants, Rai and Alam found that when "punishers" received financial bonuses for penalizing rule-breakers, cooperation rates plummeted across the board. Even people who would normally benefit from following the rules became less likely to do so.
"The participants weren't thinking about this as a social interaction about fairness anymore," notes co-author Alam. "They viewed it as a game of maximizing personal profit, and they didn't trust the punishers' motives."
The Perspective Gap: Why Voters Support What Victims Reject
Perhaps most striking was the study's finding about perspective-taking. When participants imagined themselves as potential targets of enforcement, they became highly skeptical of profit-motivated punishers. But when they viewed the situation from a distance—seeing others as the likely targets—they supported harsh penalties even when enforcers stood to profit.
This psychological phenomenon helps explain a persistent puzzle in American politics: why voters often enthusiastically support "tough on crime" policies that research shows are ineffective or counterproductive.
"People who aren't at risk of being targeted by enforcement tend to trust punishers too much," Rai observes. "They fail to consider how those policies might feel to communities that bear the brunt of aggressive enforcement. This perspective gap allows destructive policies to persist despite their obvious failures."
The implications extend far beyond academic psychology. This research provides a scientific foundation for understanding why certain communities have such fraught relationships with law enforcement, and why heavy-handed approaches often create the very problems they claim to solve.
The Neuroscience of Institutional Trust
The psychological mechanisms Rai and Alam identified align with broader research on how our brains process institutional legitimacy. When we perceive authorities as acting from genuine moral motivations, it activates neural pathways associated with cooperation and social bonding. But when we suspect ulterior motives, different circuits engage—ones associated with threat detection and defensive behavior.
This isn't merely an intellectual judgment; it's a visceral response shaped by millions of years of evolution. Our ancestors survived by quickly distinguishing between trustworthy leaders and those who might exploit the group for personal gain. Those same psychological mechanisms operate today when people encounter law enforcement.
Understanding this helps explain why the damage from profitable punishment is so persistent. Once trust is broken, it doesn't easily return—even when the system starts operating more fairly. The brain's threat-detection systems remain heightened, interpreting even legitimate enforcement actions with suspicion.
Real-World Psychology: From Asset Forfeiture to Private Prisons
The abstract findings from Rai and Alam's lab experiments become concrete when applied to actual criminal justice policies. Consider civil asset forfeiture, which allows police to seize property suspected of being connected to crimes without convicting—or even charging—the owner.
From a psychological perspective, this practice is almost perfectly designed to destroy institutional trust. Citizens observe law enforcement agencies directly profiting from seizures, making it nearly impossible to view enforcement actions as motivated by genuine concern for justice rather than financial gain.
The numbers tell the story of this psychological transformation. Civil asset forfeiture revenue grew from $93.7 million in 1986 to over $2 billion annually by 2019—a more than 2,000% increase. As these programs expanded, so did community distrust, particularly in neighborhoods where such seizures are most common.
Private prisons present a similar psychological challenge. When correctional systems are run by companies whose profits depend on maintaining high incarceration rates, it becomes difficult for both inmates and community members to view the system as genuinely concerned with justice or rehabilitation.
"The private prison industry's financial incentives are completely misaligned with public safety goals," notes criminal justice researcher Lauren-Brooke Eisen. "From a psychological standpoint, this creates a fundamental legitimacy crisis that undermines the entire corrections system."
The Cognitive Load of Distrust
Living under systems perceived as illegitimate creates significant psychological stress. When people can't trust institutional authorities, they must constantly evaluate each interaction for potential threats. This cognitive load is exhausting and leaves fewer mental resources available for the kind of prosocial behavior that makes communities function.
Research in social psychology shows that institutional distrust has cascading effects beyond the specific authorities involved. When people lose faith in law enforcement, they often become more suspicious of government generally, creating a broader crisis of social cooperation.
This psychological dynamic helps explain why communities with the most aggressive policing often have the highest crime rates. It's not that enforcement causes crime directly, but rather that illegitimate enforcement destroys the social fabric that naturally prevents crime.
Rebuilding Trust: What Psychology Tells Us
The research suggests that restoring institutional legitimacy requires more than just changing outcomes—it requires changing the psychological signals that enforcement actions send to the community.
"Even perfect enforcement doesn't work if the underlying trust isn't there," Rai emphasizes. "You need structural reforms that clearly and publicly remove profit motives from punishment. People need to see—and believe—that enforcers are acting morally, not opportunistically."
This insight aligns with successful reform efforts around the country. States that have eliminated profit incentives from enforcement have generally seen improvements in both community relations and public safety outcomes.
Consider procedural justice training for police, which emphasizes treating people with dignity and respect regardless of the outcome of an interaction. This approach recognizes that how enforcement happens matters as much as what enforcement achieves for maintaining institutional legitimacy.
The Path Forward: Psychology-Informed Policy
Understanding the psychological mechanisms behind institutional trust suggests several principles for effective criminal justice reform:
Signal Intent Clearly: Policies should be designed to communicate genuine concern for justice rather than other motivations. This means eliminating financial incentives that could be perceived as corrupting enforcement decisions.
Acknowledge Perspective Differences: Policymakers need to consider how enforcement feels to those most likely to be targeted, not just how it appears to distant observers. This requires genuine community engagement and perspective-taking.
Focus on Legitimacy, Not Just Effectiveness: A policy that reduces crime but destroys institutional trust may create more problems than it solves. Sustainable public safety requires maintaining community cooperation.
Repair Relationships Actively: Because trust, once broken, doesn't automatically return, communities that have experienced illegitimate enforcement need proactive efforts to rebuild relationships.
The Bigger Picture: Trust as Social Infrastructure
The UC San Diego research illuminates a broader truth about human societies: trust is not merely a nice-to-have feature of social systems, but rather their essential foundation. When profit motives corrupt institutions meant to serve the public good, the psychological damage extends far beyond the immediate parties involved.
This has implications that extend well beyond criminal justice. Similar dynamics operate in healthcare systems where providers profit from overtreatment, educational institutions that prioritize revenue over learning, or any context where those with authority to help or harm others have financial incentives misaligned with public welfare.
"Trust is social infrastructure," reflects Rai. "When it breaks down, everything else becomes harder. Rebuilding it requires not just good intentions, but careful attention to the psychological signals our institutions send."
As communities across America grapple with questions of public safety, criminal justice reform, and institutional legitimacy, this research provides a crucial piece of the puzzle. It suggests that the most important question isn't whether tough enforcement reduces crime in the short term, but whether it builds or destroys the social trust that makes communities truly safe in the long run.
The choice, as this research makes clear, is not just between different enforcement strategies—it's between systems that cultivate cooperation and those that corrode the very foundations of social order.
Further Reading
- Rai, T. S., & Alam, R. (2025). Profitable Third-Party Punishment Destabilizes Cooperation. Proceedings of the National Academy of Sciences.
- Rai, T. S. (2022). Material benefits crowd out moralistic punishment. Psychological Science, 33, 789-797.
- Tyler, T. R. (2006). Why People Obey the Law. Princeton University Press.
- Bottoms, A., & Tankebe, J. (2012). Beyond procedural justice: A dialogic approach to legitimacy in criminal justice. Journal of Criminal Law and Criminology, 102(1), 119-170.
About the Author: This article synthesizes recent research in social psychology, behavioral economics, and criminal justice policy. The author specializes in translating academic research into accessible insights for public understanding.
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