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Although empirical and theoretical studies affirm that punishment can elevatecollaborative efforts, its emergence and stability remain elusive. Bypeer-punishment the sanctioning is something an individual elects to dodepending on the strategies in its neighborhood. The consequences ofunsustainable efforts are therefore local. By pool-punishment, on the otherhand, where resources for sanctioning are committed in advance and at large,the notion of sustainability has greater significance. In a population withfree-riders, punishers must be strong in numbers to keep the "punishment pool"from emptying. Failure to do so renders the concept of institutionalizedsanctioning futile. We show that pool-punishment in structured populations issustainable, but only if second-order free-riders are sanctioned as well, andto a such degree that they cannot prevail. A discontinuous phase transitionleads to an outbreak of sustainability when punishers subvert second-orderfree-riders in the competition against defectors.

Sustainable institutionalized punishment requires elimination of second-order free-riders