The Economist’s Guide to Crime Busting by Philip J. Cook and Jens Ludwig

The old divide between hard and soft strategies is breaking down under a wave of new thinking about how to control crime.

hat is the more cost- Now the debate has been reopened. effective way to control It is not so much that the public Wcrime? Is it to focus on views mass incarceration, with making crime unattractive by threat- its disproportionately high levels ening offenders with long prison of imprisonment for blacks and terms? Or to make the law-abiding Hispanics, as immoral or racist. life more attractive by providing bet- Rather, the dreary fact is that, in ter education and job opportunities? the face of gaping budget deficits, It’s an old debate. The federal crime the states can no longer afford to commissions of the 1960s empha- support huge prison populations. sized crime’s links with poverty and It seems like a good time for the racism, and President Lyndon B. economists to weigh in, in part Johnson’s Great Society programs because their perspective provides were central to his war on crime. a way to get past the stale debates But ultimately the “hawks” won the over whether to adopt “tough” or debate about how to wage that war, “soft” solutions. as they did later in helping to launch President Richard M. Nixon’s war on The economic theory of crime drugs. The result has been plain to starts with the premise that crime see, with the rate of imprisonment is a choice. It is not the result of surging to unprecedented heights. character or culture, or not only of

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those things, but is at bottom us are spared the temptation to rake seen big improvements in property a product of decisions individuals in millions from fraudulent dealings values and the quality of life. Harlem make in response to their avail- by the simple fact that we wouldn’t and many other urban communities able options. Most of us choose to even know how to begin. that were once hobbled by pervasive abstain from crime in part because crime are thriving. Washington, D.C., we have a lot to lose if we get The “crime as choice” perspective the murder capital of the country for caught. Even so, we may slip up expands the discussion of crime a time during the crack epidemic, has occasionally — say, at tax time or control from the question of how become far more livable and secure. when driving — but generally the many new prisons we need to a These gains are worth a great deal, temptations of crime are not strong wider-ranging consideration of how perhaps even as much as the vast enough to override our restraint. The to make illicit choices less attractive. human and financial costs of mass calculus for an unemployed dropout incarceration. But prisons are often with readily available criminal options given far too much credit for what and few licit prospects is likely to The economic theory has occurred. appear quite different. of crime starts with The general view that crime is sup- This economic perspective gener- pressed by putting more people ates a nicely symmetrical approach the premise that crime behind bars is supported by a com- to crime control. Crime policy should monsense argument: People who focus both on making criminal oppor- is a choice. are in prison can’t commit crimes tunities less tempting and on making against those who are not. It would the law-abiding life more rewarding. indeed be surprising if locking up We can debate how best to accom- Here we will focus on three pro- so many didn’t have some effect on plish each of those aims (and long posals: raising the minimum age crime. But even a casual look at the prison terms are by no means the at which youths can leave school, statistics challenges the view that only answer for reducing temptation), promoting business improvement prison trends deserve all or most but it’s important to realize that they districts and other forms of self- of the credit for the crime drop. A are closely linked: The threat of arrest protection, and increasing taxes on look at three recent periods (see and imprisonment is sharper for alcohol. To understand why these Table 1) makes it clear that the crime those who have something to lose, measures’ moment has arrived, decline of the 1990s did coincide so giving at-risk people a bigger stake it’s first necessary to take a brief with a large increase in the prison in the law-abiding life is a deterrent excursion into the recent history of population. But the large crime to crime. American crime control efforts. increase during the preceding period coincided with an even bigger jump Of course, this logic doesn’t always The most notable feature of that his- in imprisonment, and incarcera- work out. One reason so many tory is that the rate of incarceration tions rates continued to climb after people were shocked by the criminal has increased by a factor of seven 2000 even though crime rates were charges against NFL stars Michael in the last generation. America relatively static. (Robbery is a good Vick (for staging dog fights) and now locks up 1 percent of its adult indicator of violent crime generally, Plaxico Burress (for carrying a gun population — the highest rate of and follows the same pattern as illegally) is that both had so much to imprisonment in the world. While the murder rate during the period lose. But these cases help prove the many thoughtful people are uneasy 1991-2000.) If the incarceration rule precisely because they are so about our policy of mass incarcera- surge of the 1990s gets credit for rare. When high-income people com- tion, a good number believe that it the retreat of crime, then the surge mit serious crimes, it is much more is justified by the dramatic reduc- that occurred between 1984 and often in response to opportunities for tions in crime since the early 1990s. 1991 ought to get the blame for the great financial gain: Investment bilker Homicide and robbery rates have increase in robberies in that period. Bernard Madoff comes to mind, declined to levels not seen since the Clearly, that doesn’t make sense. along with Enron president Jeffrey early 1960s. Property crime rates The point is that we can’t learn much Skilling and publishing magnate have fallen even more dramatically. from such simplistic comparisons. Conrad Black. Thankfully, most of As a result, America’s cities have

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of a particular policy, especially if it Table 1. Incarceration and Crime Rates, 1984-2008 has been tried in different times and places and a natural control group exists. That is the case with three Prisoners per Robbery rate crime control proposals that deserve 100,000 people serious attention now. 1984-1991 + 66% +33% In today’s labor market, people who 1991-2000 + 53 −47 don’t have high school diplomas 2000-2008 + 5 0 have terrible job prospects and very little to lose in economic terms, so it’s not surprising that two-thirds of the inmates in state prisons are high school dropouts. In about half the There are other reasons to ques- have been altered if, say, one of the states it’s legal to drop out of school tion the size of the impact of putting factors cited as a possible explana- at age 16, but between the 1960s more people behind bars. As Franklin tion had been removed from the mix. and ’80s some states increased their Zimring, a law professor at the In the case of the decline in crime in minimum age to 17 or 18. Those University of California, Berkeley, has the 1990s, there are several possible changes provide a natural experiment pointed out, Canada experienced a explanations. In addition to the big in the effects of extra schooling on drop in crime during the 1990s simi- increase in the incarceration rate, crime. Economists Lance Lochner lar to what the United States saw, there were significant expansions of the University of Western Ontario but without any notable expansion of police budgets and an easing of and Enrico Moretti of the University in its prison population. Of course, gang wars over the lucrative crack of California, Berkeley, found that Canadians do not make an ideal con- trade. Other pressures, such as a people in the birth cohorts that were trol group for Americans because too large increase in children born to forced to stay in school longer had many other variables are different to unmarried women and the growth of lower crime and incarceration rates the north, but the general similarity in income inequality, probably pushed as adults than their predecessors crime trends for the two countries is in the other direction, fostering an did. One extra year of high school nonetheless worth remarking upon. increase in crime. It’s nearly impos- reduced arrest rates for young men In fact, the crime drop remains an sible to sort out the impact of these by about 11 percent. It’s not clear enigma — and, seemingly, a miracle. different forces. what caused this improvement — It was completely unexpected. No everything from better economic expert (or anyone else we know of) Thinking up possible explanations prospects to the influence of a predicted it. And now, faced with the for the crime drop can be a sort of more salutary peer group could be fact that this new world of low crime parlor game for social scientists. Why a factor — but it is a remarkable rates is real and has staying power, not finger the popularity of hip-hop finding that has been confirmed by criminologists have been scram- clothes such as baggy pants, which similar studies in Britain and Italy. bling to explain it. This is not just an might impede fashionable, young instance of Monday morning quarter- would-be criminals who have to keep At a time when state budgets are backing. The stakes are high, since one hand on their waistbands. Or under severe strain, an increase the “winning” explanation is bound what about the obesity epidemic, in mandatory school attendance to influence policy. which might be weighing against the would be a huge burden. But a lot of commission of certain active crimes? additional money for schools could In the social sciences, it’s usually Or the pervasive video games that be usefully pared out of the states’ difficult to provide a satisfactory serve as a pacifier for the bored and prison budgets. Imagine that prison analysis of past national social and disaffected? The point is that if we’re sentences were cut back to what economic trends. There is only one looking for a way forward, historical they averaged in, say, 1984. That observation — a particular histori- trends in American life are unlikely to would reduce the size of the prison cal trajectory such as the decline in provide much guidance. population by about 400,000 people crime — and numerous plausible while yielding little increase in crime. explanations. There is no way of Fortunately it’s sometimes possible (The best estimate is that longer knowing how that trajectory would to isolate and measure the effects prison terms account for about a

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third of the increase in the nation’s tracking devices, get much of the organization spends a little more than prison population.) Spending on cor- credit for sharp declines in vehicle $1 million a year on private security, rections would decline by about $12 theft. There were fewer car thefts in approximately half of its operating billion, enough to fund an additional 2008 than there were 20 years ear- budget. 1 million students per year. lier. All of these efforts have the nice effect of taking the profit out of crime BIDs have been very effective at It goes without saying that the extra without resorting to punishment. reducing crime. A study by one of schooling would have a range of pos- us (Philip J. Cook) carried out with itive effects beyond crime reduction. John McDonald of the University People who earn high school diplo- of Pennsylvania found that BIDs mas enjoy better health, improved cut crime and its associated costs employment prospects and greater One extra year of high by huge amounts. Every additional success in forming families. The school reduced arrest $10,000 a BID spent reduced the same can’t be said about those who social costs of robbery by roughly serve longer prison terms. rates for young men by $150,000, and of assault by $44,000. It wasn’t just the number of crimes Our economics-based “crime of about 11 percent. that dropped, but the number of choice” framework also invites con- arrests as well. Moreover, there was sideration of things that can be done no evidence that crime was dis- on the other side of the ledger, by placed into nearby neighborhoods. reducing criminal opportunity. That brings us to our second proposal. An innovative form of self-protection Our third proposal zeroes in on One of the most underappreciated that deserves special note is the improving the quality of individuals’ developments in crime prevention business improvement district (BID). decision making rather than chang- is the rise of various kinds of private BIDs are relatively new, usually ing the options confronting them. It’s self-protection, from anti-car theft established as nonprofit organiza- obvious that in considering criminal technology to new forms of commu- tions in downtown commercial areas opportunities, such as whether to nity organization. by merchants and property owners break a beer bottle over the head who aim to make their neighbor- of the obnoxious Yankee fan on the For many youths, the choice to hoods “clean” and “safe” — two next barstool, people often make commit a crime such as shoplifting words that are repeated like mantras foolish, impulsive choices. There are or robbery is strongly influenced in the world of BIDs. The city govern- many reasons for that — hormones, by how many opportunities they ment’s role is chiefly to provide the immaturity, stress — but surely one see and how lucrative these organization with the authority to of the most important is intoxication. opportunities appear to be. Private collect fees from local businesses. Public policies that reduce alcohol self-protection measures give them There are more than 1,000 BIDs in abuse are a pretty obvious crime a shorter and less appealing menu. American cities, and they are start- prevention measure. During the Uniforms by themselves tend to ing to appear in Europe as well. The Euro 2000 soccer championships, restrain vagrant appetites. The ranks Hollywood Entertainment BID in the mayor of the Dutch host city of of private security guards in the California was one of the pioneers in Eindhoven ordered the city’s bars United States have been growing the 1990s. It employs armed private and restaurants to serve only half- rapidly — at more than 1 million, they security officers, usually retired law- strength beer, hoping to stave off now outnumber police officers. The enforcement officers, who patrol the violence by Britain’s notorious soccer move toward a cashless economy Hollywood district seven evenings hooligans. The city remained peace- has made robbery less lucrative, a week, accomplishing a great deal ful for the most part. The next week and burglars increasingly must simply by being a presence. They the games shifted to Belgium, where contend with sophisticated alarms keep an eye on potential troublemak- the beer was full strength and free on houses. Technological change ers and get to know the local cast of flowing, and the British fans resumed has also helped. High-tech devices characters. The BID has also installed their violent ways. on new vehicles that make starting eight closed-circuit television cam- the engine without the key almost eras for the Los Angeles Police Many studies show that alcohol is a impossible, along with hidden GPS Department to use. All told, the significant factor in various kinds of

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crime. Victim reports suggest that new approaches that recognize America’s next war about one-third of those who com- that we can deter crime by improv- on crime must look mit rapes and other sex crimes and ing people’s life chances, and that one-quarter of those who commit coercion can in some cases be a at the full spectrum assaults have been drinking. One key element of such efforts, as with straightforward way to reduce this compulsory schooling laws. As in of solutions and pay sort of crime is to raise the price of medicine, an ounce of prevention beer, wine and hard liquor. Raising it is worth a pound of cure. We must special attention to 55 cents might not seem like a big learn to think of programs as various increase, but it would be enough to as preschool education and drug giving those people persuade, say, some teenagers not treatment as elements of our crime- to pick up that second six-pack for fighting strategy. America’s next war who are most likely to Thursday night. Data from a 2007 on crime must look at the full spec- book by one of us, Cook’s Paying trum of solutions and pay special turn to crime the skills the Tab, suggest that a 55-cent tax attention to giving those people would reduce beer consumption by who are most likely to turn to crime and incentives to make around six percent. And there would the skills and incentives to make a be significant fringe benefits, includ- better choice. a better choice. ing fewer auto accidents and more money for state treasuries. This article was originally published in The Wilson Quarterly, Winter 2011. These and similar ideas represent a new frontier in thinking about crime. Whatever one thought of the old About the authors: Philip J. Cook is the formula of putting more and more ITT/Terry Sanford Professor of Public people behind bars, it is simply no Policy at Duke University. Jens Ludwig longer affordable. Likewise, the is the McCormick Foundation Professor old debate between hard and soft of Social Service Administration, Law, approaches to crime has been and Public Policy at the University of exhausted. The line between those Chicago. false extremes is being blurred by NCJ 238489

Watch an interview of Philip J. Cook on the economistic framework of crime control: http://nij.ncjrs.gov/multimedia/video-cook.htm.

Watch an interview of Jens Ludwig on the intangible costs of crime: http://nij.ncjrs.gov/multimedia/video-ludwig.htm.

Listen to Philip J. Cook’s Research for the Real World seminar “Economical Crime Control: Perspectives From Both Sides of the Ledger”: http://www.nij.gov/ nij/multimedia/presenter/presenter-cook.

Listen to Jens Ludwig and Roseanna Ander’s Research for the Real World seminar “Benefit-Cost Analysis for Crime Policy”: http://www.nij.gov/nij/ multimedia/presenter/presenter-ander-ludwig.

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