The problem is that they only punish the student who breaks the rules. That does not instill a sense of group responsibility. Your actions reflect on your family, friends, community, etc. The paddling must be administered to the entire class. You not only paddle the child, you make him watch along with the rest of the class while every student in the class is punished because of HIM and the entire class of students who are being punished because of HIM are watching. He does not want to be THAT GUY again.
It is an extension of the concept of group responsibility that he learns when he or one of his brothers breaks the rules at home.