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Fiscal Incentives in Law Enforcement

Author

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  • Anna Harvey

Abstract

In recent years, numerous observers have raised concerns about “policing for profit,” or the deployment of law enforcement resources to raise revenue rather than to provide public safety. However, identifying the causal effects of fiscal incentives on law enforcement behavior has remained elusive. In a regression discontinuity design implemented on traffic citation and accident data from Saskatchewan, Canada between 1995 and 2016, a fiscal rule reducing by 75% the share of traffic fine revenue captured by the province in towns above 500 in 1996 population is associated with increased rates of accidents, accident-involved vehicles, accident costs, and accident-related injuries in towns just above this threshold, relative to towns just below the threshold. Further, 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 suspensions. These findings suggest that fiscal incentives can indeed distort the allocation of law enforcement effort, with distributional consequences for both public safety and economic well-being.

Suggested Citation

  • Anna Harvey, 2020. "Fiscal Incentives in Law Enforcement," American Law and Economics Review, American Law and Economics Association, vol. 22(1), pages 173-210.
    • Handle: RePEc:oup:amlawe:v:22:y:2020:i:1:p:173-210.
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    File URL: http://hdl.handle.net/10.1093/aler/ahaa001
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    Citations

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    Cited by:

    1. Nicola Mastrorocco & Arianna Ornaghi, 2020. "Who Watches the Watchmen? Local News and Police Behavior in the United States," Trinity Economics Papers tep0720, Trinity College Dublin, Department of Economics, revised Nov 2020.
    2. Yahagi, Ken, 2021. "Law enforcement with motivated agents," International Review of Law and Economics, Elsevier, vol. 66(C).
    3. Losak, Shannon R. & Makowsky, Michael D., 2024. "Lame duck law enforcement," Economics Letters, Elsevier, vol. 238(C).
    4. Florian Baumann & Sophie Bienenstock & Tim Friehe & Maiva Ropaul, 2023. "Fines as enforcers’ rewards or as a transfer to society at large? Evidence on deterrence and enforcement implications," Public Choice, Springer, vol. 196(3), pages 229-255, September.
    5. Mungan, Murat C., 2023. "False proxies for enforcement distortions in “policing for profit” research," Economics Letters, Elsevier, vol. 230(C).

    More about this item

    Keywords

    K42; H71; H76;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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