Safeguards may be too weak or too strong to counter transgressions effectively. A flyswatter cannot pound a nail, and a hammer is more likely to damage a surface than squash the fly flitting from it. Safeguards do not have infinitely flexible sanctions: the judiciary has a light touch, while intergovernmental retaliation quickly becomes unwieldy and is best reserved for major transgressions. This chapter continues to develop the systems theory of safeguards by exploring how the punishment capacity of safeguards complement one another.

THE ISSUE: INEFFICIENT SAFEGUARDS

“After an unequivocal experience of the inefficiency of the subsisting federal government, you are called upon to deliberate on a new Constitution for the United States of America.” With these words, Alexander Hamilton opened the editorials which became the Federalist. His oneword diagnosis of the Articles of confederation's flaw was inefficiency, exactly the word that any modern political economist would choose. In order for any safeguard'structural, popular, political, or judicial—to deter transgressions, it establishes a threshold that when crossed, triggers a punishment. With pencil and paper, it is possible to derive the efficient threshold and punishment combination. The sanctioning mechanism in place under the Articles of Confederation was not efficient in this sense; the expectations of behavior, in terms of state compliance, were not consistent with the incentives provided by intergovernmental retaliation. Instead, the Articles generated much lower levels of compliance than hoped because the only safeguard, intergovernmental retaliation, could not punish effectively.