29 Pages Posted: 10 Mar 2016 Last revised: 12 Jan 2017
Date Written: January 9, 2017
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: 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