Economics of crime

Economics of crime
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Whether driving one’s car or attending a football match in Jordan, one can easily surmise that disrespect for the law is on the rise, and has for quite some time now.

Here is an economist’s take on the issue.

Gary S. Becker, the Nobel laureate in economics, wrote a seminal paper in 1968 on the economics of crime. The paper analysed, utilising economic principles, the causes of criminal activities and provided prescriptions for countering the behaviour. The research spurred thousands of additional research into the topic, not only in the field of economics but also in sociology, criminology and other social sciences.

The basic premise of Becker’s paper is that people, on the average, tend to rationalise; they measure the cost and benefit of an action before they do it. If the cost outweighs the benefit, they are less likely to commit a crime.

The reverse is true. Of course, there are those who act irrationally, but the majority of people will weigh the outcomes of their actions before they do them; otherwise, society will turn to lawlessness, something nobody wants.

The crime, thus, can be analysed based on three principles:

- Possibility of punishment for committing the act. If one faces a low probability of being caught, the expected cost will be minimal and the benefit will most likely outweigh it.

- The size of the reward or benefit. The larger the reward relative to one’s welfare/income/wealth, the more likely it is that the person will commit the crime.

- The severity of the punishment, which is a cost. The higher the cost, the less attractive the crime. Taken together, the three principles explain why people would in general commit a crime.

Let’s apply this to driving on the road. If one believes that changing lanes without signalling will not lead to a ticket, he will most likely do it. The same applies to wearing a seatbelt, tailgating, speaking on the cellular phone while driving, cursing and harassing others, driving without headlights at night, etc. All are simple acts that we would avoid doing if we knew we would be surely ticketed for doing them.

It is true that some of the acts can be captured by the police cameras, but this is not enough, because the punishment is delayed or deferred, and lessons from seeing someone pulled over by the police are not learnt.

Now, drive along a street and see whether these acts are penalised by the police, and then determine for yourself which of the principles were broken and by whom.

An example of a good and effective policy can be gleaned from the Big Apple (New York City). Two decades ago, wall graffiti could be widely seen and growing, annoying dwellers and visitors, and projecting a picture of lawlessness in the city.

New York City suffered badly from this phenomenon. It resolved the issue by having a vigilant force that undid what the” graffiti artists” did immediately upon completion of the murals. And the artists, if and when caught, were penalised. What the city regulators did was to erase the artists’ reward (their art work was never seen as it was immediately removed), and the likelihood of being caught was increased, and when caught, the offenders were penalised.

Small infringements upon the law that go unpunished can lead to major crimes. A small anti-social behaviour that is not deterred early on will encourage larger crimes. Society must go after the small as well as the large offences and be consistent in terms of capture and punishment. Only then will the crime rate subside.