Constitutional Law | First Amendment | Higher Education | Law
One underappreciated cost of constitutional rights enforcement is moral hazard. In economics, moral hazard refers to the increased propensity of insured individuals to engage in costly behavior. This Essay concerns what I call “constitutional moral hazard,” defined as the use of constitutional rights (or their conspicuous absence) to shield potentially destructive behavior from moral or pragmatic assessment. What I have in mind here is not simply the risk that people will make poor decisions when they have a right to do so, but that people may, at times, make poor decisions because they have a right. Moral hazard is not about how individuals behave in general but on the margins. It concerns the incentive effect of holding security against worst-case scenarios.
Thus, imagine a D.C. parent who, inspired by the Supreme Court’s decision in District of Columbia v. Heller, keeps a loaded handgun within reach of a toddler. A significant risk of injury to the child is present whether or not handgun possession is constitutionally protected. But, on the margins, the risky behavior may be more likely to occur if prosecution for illegal possession is off the table. Or consider a homeowner who refuses to sell his or her home for an economic development project at a price that he or she would accept in the absence of property protections under the Takings Clause.
Constitutional Moral Hazard and Campus Speech,
Wm. & Mary L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/2997