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.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
10484.
Length: Date of creation: May 2004 Date of revision: Handle: RePEc:nbr:nberwo:10484
Note: PE Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: H0 - Public Economics - - General H7 - Public Economics - - State and Local Government; Intergovernmental Relations
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: