Policing For Profit: The Political Economy of Law Enforcement
Posted: 18 Jun 2018 Last revised: 4 Nov 2019
Date Written: June 17, 2019
In recent years numerous observers have raised concerns about "policing for profit," or the deployment of law enforcement resources to raise funds for cash-strapped jurisdictions. However, identifying the causal effect of fiscal incentives on law enforcement behavior has remained elusive. We model the effects of fiscal incentives on traffic safety enforcement, finding that rules allocating a greater share of fine revenues to deploying jurisdictions may induce increased enforcement effort by patrol officers, and consequent reductions in unsafe driving behavior, with only indeterminate effects on the frequency of citations. We test this model using citation and accident data from Saskatchewan, Canada between 1995 and 2016, for towns policed under the province's contract with the Royal Canadian Mounted Police. We find that fiscal rules reducing the share of fine revenue captured by the province in towns above a sharply defined population threshold increase the frequency and severity of accidents in these towns, but have no effects on the frequency of traffic stops. We also find that cited drivers in towns just below this threshold are given fewer days to pay their fines and are less likely to pay their fines on time, leading to higher risks of late fees and license suspension. These results are robust to the use of both data-driven regression discontinuity and local randomization inference strategies. We observe no discontinuities in the citation and accident data at the threshold during the period prior to the introduction of these fiscal rules, in the areas "near" these jurisdictions, within which the province receives 100% of fine revenue throughout our period of interest, or at any of multiple placebo thresholds constructed on either side of the actual population threshold.
Keywords: Law Enforcement, Fiscal Incentives, Political Economy, Accidents, Traffic Safety
JEL Classification: K42, H27, R41
Suggested Citation: Suggested Citation