To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement

This study uses variation in the incentives that police departments have to raise revenue (e.g., laws and policies governing property seizures and allocation of fine revenue) in order to demonstrate the consequences of policing practices motivated on that basis. The study notes that the “opportunity cost” that police face differs for various enforcement practices – for example, police may choose to increase drug arrests in a Black neighborhood instead of a student housing complex near a university campus because university officials have more political power to protest that decision.

To conduct this analysis, the authors used data from the U.S. Fiscal Census of Local Governments regarding budget deficits in several types of municipal governments nationwide and arrest data from the National Incident-Based Reporting System. Both datasets included data between 2002 and 2012.

In their preliminary analysis, the authors found that as drug arrests per capita increase, so do municipal revenues (with a smaller increase for white drug arrests compared to Black and Hispanic drug arrests). By contrast, municipal revenues do not increase at the same rate with increased arrests for violent crimes.  The authors suggest that the small revenue increase could be explained by “parallel increases in drug arrests” (i.e., violent crimes connected to drug offenses).

The authors’ completed model predicts that when a local government is experiencing a fiscal crisis, local police departments will increase arrests for “offenses that carry fines or the opportunity to forfeit assets.”

You can read the full text of the study here, but it is behind a paywall.

Our results serve as evidence that optimal deterrence is not the sole criteria for arrests, and that police officer behavior is influenced by local fiscal conditions.

Michael Makowsky, Thomas Stratmann, Alex Tabarrok