Economic Models of Crime and Punishment

John J. Donohue III Economic Models of Crime and Punishment OVER THE LAST 4 5 Y E A R S, THREE M O N U M EN TA L STORIES HAVE d o m in ated th e national American crime scene.* The first was the run up in crime in the 1960s as a num ber of social forces converged into a perfect storm of increased crim inal activity. These forces included the coming of age of the baby boomers and the accompanying and inter­ related stresses of the massive baby boom cohort entering its highcrime years at a tim e of rebellion and strife over racial injustice and the Vietnam War. Moreover, the youth counterculture fueled a grow­ ing black m arket for illegal drugs, and an ideology of permissiveness likely encouraged greater lawlessness and restrained effective criminal justice responses to the burgeoning crime rates. In 1968, the famed psychiatrist Karl M enninger wrote in his book The Crime ofPunishment th at “I suspect that all the crimes com m itted by all the jailed crim i­ nals do not equal in total social damage that of the crimes committed against them .” A Time magazine review of M enniger’s book captures a dom inant strain of thought at that time: Judges before sentencing should be provided w ith psychi­ atric reports and (as in California) hand out only indeterm i­ nate sentences, the ultim ate length to be decided by skilled penologists according to each prisoner’s response to treat­ m ent. Penologists already agree th at only about 15% of convicted people are so dangerous or hopeless as to require im prisonm ent. The new consensus is that m any offendsocial research Vol 74 : No 2 : Summer 2007 379 ers should rem ain either in or close to their communities and be taught how to cope w ith life and work under close supervision (“A Psychiatrist Views Crime,” 1968). The m ajor increase in crime in the United States set the table for Gary Becker’s pioneering w ork on the economics of crime. W riting in the same year that M enninger published his book, Becker became an early advocate for increasing the costs of engaging in crim inal activ­ ity, w hich was an im portant corrective to the som ewhat Pollyannish opposition to punitive sanctions in the late 1960s. Becker’s message started to powerfully influence crim inal justice policy in the 1970s and provided the intellectual support for the second m ajor story: the increasing harshness of the American crim inal justice system over the last 30 years. The m ajor elem ents of this increasing punitive sentim ent were fueled by a som ew hat one-sided focus on the punitive dim en­ sion of the economic model of crime: raise the price of an undesirable behavior, and you will get less o f it. This approach led to an explosion in the prison and jail populations, propelled in part by another victory of the punitive elem ent of the economic model of crime: the w ar on drugs. Similarly, the punitive message has carried over to a revival of the use of capital punishm ent, which was sustained in 1976 by the US Supreme Court after a brief m oratorium and then used w ith increasing frequency in the early to mid-1990s. The th ird m ajor story—finally som e good new s—was the dramatic, abrupt, and widespread drop in crime that began in the early 1990s. For some, the story is a neat and tidy one: laxity bred crime in the late 1960s, and the crim inal justice system’s ultim ate harsh response restored greater order. Others are convinced that none of the harsh measures—increased levels o f incarceration, the w ar on drugs, greater reliance on the death penalty, and a m ore visible and aggressive police presence—had any im pact on crim inal behavior. To have any hope of teasing out the causal factors behind these dramatic events, one needs a sound theoretical fram ework, a sophisticated understanding of the empirical/econometric literature, and, equally importantly, a relentless 380 social research...