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

29 Pages Posted: 10 Mar 2016 Last revised: 12 Jan 2017

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: January 9, 2017

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 is, as predicted by our model, increasing at a far faster rate with drug arrests than arrests for violent crimes. Revenues are also, however, increasing 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 arrests and associated property seizures increase with local deficits when institutions allow officials to more easily retain revenues from forfeited property. We do not observe similar increases in white arrests or property seizures. 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 (January 9, 2017). GMU Working Paper in Economics No. 16-17. Available at SSRN: https://ssrn.com/abstract=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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