To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement
33 Pages Posted: 10 Mar 2016 Last revised: 11 Sep 2018
Date Written: August 30, 2018
We exploit local deficits and state-level differences in police revenue retention from civil asset forfeitures to estimate how incentives to raise revenue influence policing. In a national sample, we find that local fine and forfeiture revenue increases at a faster rate with drug arrests than arrests for violent crimes. Revenues also increase at a faster rate with black and Hispanic drug arrests than white drug arrests. Concomitant with higher rates of revenue generation, we find that black and Hispanic drug, DUI, and prostitution arrests, and associated property seizures, increase with local deficits when institutions allow officials to more easily retain revenues from forfeited property. White drug and DUI arrests are insensitive to these institutions. We do, however, observe comparable increases in white prostitution arrests. Our results show how revenue-driven law enforcement can distort police behavior.
Keywords: Law Enforcement, Crime, Political Economy, Local Public Finance, Race
JEL Classification: H71, K42
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