Finders Keepers: Forfeiture Laws, Policing Incentives, and Local Budgets

Katherine Baicker and Mireille Jacobson

No 10484, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In order to encourage anti-drug policing, both the federal government and many state governments have enacted laws that allow police agencies to keep a substantial fraction of assets that they seize in drug arrests. By adjusting their own allocations to police budgets, however, county governments can effectively undermine these incentives, capturing the additional resources for other uses. We use a rich new data set on police seizures and county spending to explore the reactions of both local governments and police to the complex incentives generated by these laws. We find that local governments do indeed offset the seizures that police make by reducing their other allocations to policing, undermining the statutory incentive created by the laws. They are more likely to do so in times of fiscal distress. Police, in turn, respond to the real net incentives for seizures, once local offsets are taken into account, not simply the incentives set out in statute. When de facto policies allow police to keep the assets they seize, they seize more. These findings have strong implications for the effectiveness of using financial incentives to solve agency problems in the provision of public goods in a federal system: agents respond to incentives, but so do intervening governments, and the effectiveness of federal and state laws in influencing agents' behavior is limited by the ability of local governments to divert funds to other uses.

JEL-codes: H0 H7 (search for similar items in EconPapers)
Date: 2004-05
New Economics Papers: this item is included in nep-ure
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as Baicker, Katherine and Mireille Jacobson. "Finders Keepers: Forfeiture Laws, Policing, and Local Budgets." Journal of Public Economics 91, 11 (December 2007): 2113-2136.

Downloads: (external link)
http://www.nber.org/papers/w10484.pdf (application/pdf)

Related works:
Journal Article: Finders keepers: Forfeiture laws, policing incentives, and local budgets (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10484

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10484

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().