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Performance contracts for police forces

Listed author(s):
  • Ben Vollaard


In 2003, the government will enter into performance contracts with each of the 25 regional police forces. The performance contracts establish a direct link between meeting a number of quantitative performance targets and financial incentives. A major improvement in police performance is necessary to meet the objective of 20 to 25 percent less criminal and disorderly behavior by 2006. A closer look at the performance contracts learns that they may not be the most appropriate policy instrument to achieve this objective. The nature of police work does not allow for advance planning of outputs. The police consist of professionals who need a high degree of discretion to do their work. The targets invite adverse behavioral effects. Management could become focused on 'meeting the numbers' rather than on delivering results. Because of the wide variety in police tasks and the low measurability of quality, there is a wide gap between performance measures and results. The financial incentives make it worse, by forcing a yes/no decision based on weighing multiple, non discrete performance measures. Moreover, the targets are likely to be off since the government does not have the information to set them at the right level. Less financial resources for poorly performing forces also adversely affect citizens. They cannot choose between providers of police services as in the case of hospitals or schools. Experiences in Australia and the United Kingdom suggest an alternative approach. They focus on benchmarking of police forces without direct financial incentives. Both countries have invested many years in improving the quality and comparability of police data as well as methods for fair comparisons between forces. Based on these comparisons, police forces are hold accountable. Consequently, the police are being forced to develop a clear picture of the effects of their approach in terms of the region's specific problems. The Dutch government could follow a similar approach. A system of peer review and customer satisfaction surveys can be instrumental in assessing a force's performance and in providing ideas for improvement. Critical assessment of performance data by knowledgeable people is a necessary ingredient to a policy of holding the police accountable to results. It stimulates a culture of experimenting, data collection and analysis, and singling out and sharing best practices. Such a change is necessary to bring about the desired improvement in police performance.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Document with number 31.

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Date of creation: May 2003
Handle: RePEc:cpb:docmnt:31
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  1. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
  2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  3. Shirley, Mary M & Xu, Lixin Colin, 2001. "Empirical Effects of Performance Contracts: Evidence from China," Journal of Law, Economics and Organization, Oxford University Press, vol. 17(1), pages 168-200, April.
  4. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
  5. Alejandro Reynoso, 2002. "Can Subsidiaries of Foreign Banks Contribute to the Stability of the Forex Market in Emerging Economies? A Look at Some Evidence from the Mexican..," NBER Working Papers 8864, National Bureau of Economic Research, Inc.
  6. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1127-1161.
  7. George Baker, 2002. "Distortion and Risk in Optimal Incentive Contracts," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 728-751.
  8. repec:hrv:faseco:30727607 is not listed on IDEAS
  9. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
  10. Roger Carrington & Nara Puthucheary & Deirdre Rose & Suthathip Yaisawarng, 1997. "Performance Measurement in Government Service Provision: The Case of Police Services in New South Wales," Journal of Productivity Analysis, Springer, vol. 8(4), pages 415-430, November.
  11. Justin McCrary, 2002. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime: Comment," American Economic Review, American Economic Association, vol. 92(4), pages 1236-1243, September.
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