Overcriminalization refers to the situation in which the marginal benefit of introducing an additional criminal law falls short of its marginal cost. In fact, if a society is excessively criminalized, each new criminal provision imposes considerable harm to the society. The literature postulates that the social harm of overcriminalization is at least threefold. First, it produces too many ex-convicts making economic agents intimidated by the fear of being punished, while weakening the intended desirable functions of criminal punishment over time as well. Second, it necessarily leads to distortion in the incentives of law enforcers usually associated with their discretion, which casually results in corruption. Third, it causes so pervasive inefficiency in allocating scarce law enforcement resources that all enforcement agencies are faced with severe congestion.

Regrettably, overcriminalization has emerged as a serious legal and economic problem in Korea. First of all, for the past decades Korea has introduced innumerable government regulations. The country has subsequently developed a growing list of the so-called ‘regulatory crimes’: criminal punishment, among other sanctioning instruments, has been overwhelmingly used for regulatory violations. Consequently, the country witnesses a steady increase in the number of reported crimes and enormously fast growing ex-convicts. Many innovative and surplus-creating activities are being discouraged. Nevertheless, the law and economics scholars have argued for long time that criminal punishment is justified only when other deterrent mechanisms are neither available nor most appropriate.