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

33 Pages Posted: 10 Mar 2016 Last revised: 11 Sep 2018

See all articles by Michael D. Makowsky

Michael D. Makowsky

Clemson University - John E. Walker Department of Economics

Thomas Stratmann

George Mason University - Buchanan Center Political Economy; CESifo (Center for Economic Studies and Ifo Institute)

Alexander T. Tabarrok

George Mason University - Department of Economics

Date Written: August 30, 2018

Abstract

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

Suggested Citation

Makowsky, Michael D. and Stratmann, Thomas and Tabarrok, Alexander T., To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement (August 30, 2018). GMU Working Paper in Economics No. 16-17. Available at SSRN: https://ssrn.com/abstract=2745000 or http://dx.doi.org/10.2139/ssrn.2745000

Michael D. Makowsky (Contact Author)

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States

HOME PAGE: http://michaelmakowsky.com

Thomas Stratmann

George Mason University - Buchanan Center Political Economy ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-2330 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Alexander T. Tabarrok

George Mason University - Department of Economics ( email )

MSN 1D3
4400 University Drive
Fairfax, VA 22030
United States
703-993-2314 (Phone)

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