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Economic Freedom and Public, Non-Market Institutions: Evidence from Criminal Prosecution

Author

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  • Claudio Detotto

    (University of Sassari)

  • Bryan C. McCannon

    (West Virginia University, Department of Economics)

Abstract

Economic freedom, which measures the protection of property and freedom to contract, is generally argued to capture the quality of a state’s institutions regarding market activity. As to be expected, numerous studies have found that economic freedom is associated with good economic outcomes. Additionally, much effort in public economics has worked to identify the features of quality non-market public institutions. No effort has been made to connect institutions that influence market activity and institutions that govern non-market activities. We take a first step. We employ a linear programming method for measuring relative efficiencies known as Data Envelopment Analysis. We apply this technique to information on the use of inputs to the production of the prosecution of crime across the thousands of local prosecutor offices in the U.S. We then compare state-level measurements of prosecution productivity with data on state-level economic freedom from the Economic Freedom of North America index. We show that there is a positive and statistically significant relationship between the two. Those states that develop institutions respecting economic freedom also tend to be the states that develop efficient publicly-provided services.

Suggested Citation

  • Claudio Detotto & Bryan C. McCannon, 2015. "Economic Freedom and Public, Non-Market Institutions: Evidence from Criminal Prosecution," Working Papers 15-16, Department of Economics, West Virginia University.
  • Handle: RePEc:wvu:wpaper:15-16
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    References listed on IDEAS

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    Cited by:

    1. Amir B. Ferreira Neto & Joshua Hall, 2017. "Economies of Scale and Governance of Library Systems: Evidence from West Virginia," Working Papers 17-13, Department of Economics, West Virginia University.

    More about this item

    Keywords

    Data Envelopment Analysis; economic freedom; efficiency; prosecution; publicly-provided services;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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