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

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  • Michael D. Makowsky
  • Thomas Stratmann
  • Alex Tabarrok

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 faster with drug arrests than arrests for violent crimes. Revenues also increase faster with arrests of blacks and Hispanics than with whites’ drug arrests. Concomitant with higher rates of revenue generation, we find that arrests of blacks and Hispanics for drugs, driving under the influence, and prostitution, and associated property seizures, increase with local deficits when institutions allow officials to more easily retain revenues from forfeited property. Whites’ drug and driving under the influence arrests are insensitive to these institutions. We do, however, observe comparable increases in whites’ prostitution arrests. Our results show that revenue-driven law enforcement can distort police behavior and decision-making, altering the quantity, type, and racial composition of arrests.

Suggested Citation

  • Michael D. Makowsky & Thomas Stratmann & Alex Tabarrok, 2019. "To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement," The Journal of Legal Studies, University of Chicago Press, vol. 48(1), pages 189-216.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/700589
    DOI: 10.1086/700589
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    Citations

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    Cited by:

    1. 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.
    2. Yahagi, Ken & Yamaguchi, Yohei, 2023. "Law enforcement with rent-seeking government under voting pressure," International Review of Law and Economics, Elsevier, vol. 73(C).
    3. Alventosa, Adriana & Antonioni, Alberto & Hernández, Penélope, 2021. "Pool punishment in public goods games: How do sanctioners’ incentives affect us?," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 513-537.
    4. Siân Mughan & Joanna Carroll, 2021. "Escaping the long arm of the law? Racial disparities in the effect of drivers' license suspensions on offense probabilities," Southern Economic Journal, John Wiley & Sons, vol. 87(4), pages 1366-1389, April.
    5. Yahagi, Ken, 2021. "Law enforcement with motivated agents," International Review of Law and Economics, Elsevier, vol. 66(C).
    6. Travova, Ekaterina, 2023. "Under pressure? Performance evaluation of police officers as an incentive to cheat," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1143-1172.
    7. Pacewicz, Josh, 2020. "The politics of subnational taxation in comparative perspective," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 21(2), pages 26-35.
    8. Evan M. Calford & Gregory DeAngelo, 2023. "Ambiguity and enforcement," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 304-338, April.
    9. Cho, Sungwoo & Gonçalves, Felipe & Weisburst, Emily, 2021. "Do Police Make Too Many Arrests? The Effect of Enforcement Pullbacks on Crime," IZA Discussion Papers 14907, Institute of Labor Economics (IZA).
    10. Losak, Shannon R. & Makowsky, Michael D., 2024. "Lame duck law enforcement," Economics Letters, Elsevier, vol. 238(C).

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