“Do the crime, do the time”, is the common attitude towards criminals. Surely it is reasonable to expect convicted criminals to be punished? Yes, that is certainly a reasonable assumption to show society is serious in punishing anti-social behaviour such as assault, rape, murder and corruption (to name a few). But many of these criminals will be released back into society after “doing the time”. I went to a one-day conference organised by the Lentara UnitingCare to learn about these issues. What struck me was how much resources are being wasted by a reactive approach to crime. In today’s post, I want to explore the economics of a tough on crime policy. What are the benefits and costs on tough on crime? Is there an alternative? If so, is it a more efficient approach to being tough on crime?
What Does Tough on Crime Really Mean?
Being tough on crime is essentially a punitive approach to enforcing the law. That could mean longer sentences for crime, harsh punishments (e.g. whipping or chopping off a limb) or lower burden of proofs. A punitive approach could have a deterrent effect on potential criminal behaviour. The prospect of spending time in prison is an effective deterrent to most people. At least people with alternative economic options.
For those people with few options, a punitive approach may make perversely make crime a more financially attractive option. The global ‘War on Drugs’ is case where the higher risk of drug smuggling or manufacturing increases the risk premium and therefore the returns to crime. The risk premium may be so high it may actually attract talented individuals from the ‘legal’ part of the economy. Watch Breaking Bad if you don’t believe me.
The Effect of Tough on Crime Policies
Increasing the returns to crime is not the only perverse outcome of a punitive approach to crime. In Victoria, where sentencing laws have been recently reformed to abolish suspended sentencing and introduce baseline sentences, recidivism (i.e. re-offending) rates increased from 34% to 40% for 2013-14. Prison populations have increased as a result. Overall crime rates increased 5.7% in one year to the end of financial year 2013/14. It’s too early to say if this has reversed the long-term trend of gradually increasing crime.
Higher prison population would naturally lead to higher costs. According to the Victorian Department of Justice, it costs $269.56 per prisoner per day in 2013/14. Annually, this is nearly $100,000 per prisoner. The Victorian Government forecasts that the cost of imprisonment to rise to $1 billion at the end of the 2014/15 financial year.
If the trends in higher recidivism and incarceration rates increase into the future, the costs of this tough on crime policy are likely to increase. This is probably not the outcome the Victorian Government were looking for. They were probably aiming for increased community safety and a decline in crime rates. Instead, this policy may actually make crime worse and as a result, reduce public safety.
How did this happen? According to speakers at the conference I attended, the Victorian prison system is not designed to rehabilitate prisoners. Also, community attitudes towards ex-offenders is especially unforgiving, making it difficult for them to get onto the straight and narrow. Is there any hope? Are we doomed to live in a society that alienates a part of the community and drives them towards criminal activities?
What about Rehabilitation and Reintegration into Society?
Fortunately, the conference did provide some hope that government, social service organisations and business can do something to rehabilitate ex-offenders looking to change their life around.
The keynote speaker was Prof. Chris Trotter from Monash University. He discussed the importance of ‘socialisation’ in determining the success of rehabilitation. Ex-offenders and probation officers with high socialisation are likely to achieve rehabilitation. Socialisation is essentially a measure of predilection for criminal behaviour: those with high socialisation are less predisposed to criminal behaviour whilst the converse is true. If probation officers ‘models’ pro-social behaviours with the ex-offender, this is likely to reinforce their natural predisposition. Results presented by Prof. Trotter showed that this ‘pro-social modelling’ approach to probation could reduce recidivism by around 50%.
Next, I attended a workshop on reintegrating ex-offenders into the labour force. It was run by Ms Mary Matthews from the Toll Group, an Australian-based global logistics company. Toll runs a program to provide employment opportunities for ex-offenders called ‘Second Step‘. It was an outshoot of a previous program (‘First Step’) that was designed to reduce alcohol and drug addiction in the transport industry. Second Step is designed to improve the readiness for work of ex-offenders by giving them training and a 12-month work placement in a Toll workplace. For many ex-offenders, this may be their first opportunity to experience legitimate work. Their criminal history is kept confidential to prevent the worker being stigmatise. At the end of the placement the ex-offender (or participant) may or may not be offered a longer-term role depending on their performance and business conditions. This experience enables the participant to be able to more confidently apply for other jobs knowing they have the necessary experience to show they are competent. Such programs could help reduce recidivism because they are now able to benefit from legitimate economic opportunities.
One thing that I’m unclear on is how much pro-social modelling and the Toll programs cost. The costs could be substantial in terms of training appropriate staff to model the behaviour, providing the training and support networks. In addition, many people at the conference alluded to the role of housing in reducing recidivism. Having a fixed address is important for accessing government services. Indeed, Toll do not accept ex-offenders who do not have a fixed address. Having housing reduces the need to commit theft or other crimes. So, the provision of housing services could be a significant component of reintegrating ex-offenders into society and the workforce.
On the benefit side, we have discussed how pro-social modelling could reduce recidivism by 50%. If this result is scaled up, that is a saving of $100,000 for every ex-offender who does re-offend. Furthermore, if they are able to find gainful employment, that would be an increase in income for the ex-offender. These two benefit could make the cost of a well-thought out prisoner reintegration program a good investment for government or impact investors.
Finally, lower recidivism would result in safer communities. This would allow the broader community to engage in economic, recreational and social activities with less of a need to take costly precautions. Also, government would have to spend less on law enforcement.
The Economic Case for an Outcomes-based Approach to Crime
I would argue that the ‘tough on crime’ approach is a process-based approach to crime policy. This may seem counter-intuitive because the rhetoric is about reducing crime. That is true. But how it is implemented is more about how it is done rather than what was actually achieved. The emphasis is on the punitive aspect based on the assumption that the deterrent effect would reduce crime.
Is it possible to have an outcomes-based approach? I would say the pro-social modelling approach is. It can be shown that pro-social modelling reduces recidivism. Similarly, Toll’s Second Step program is designed to reduce recidivism by providing ex-offenders with the ability to access legitimate employment opportunities. By reducing recidivism, both of these approaches can reduce crime rates by reducing the pool of criminal actors.
Is there an economic case for adopting these outcomes approach to crime? I qualitatively discussed how the costs could be outweigh by the benefits of reduce incarceration costs, income to the ex-offender and reduced law enforcement costs. However, this would need to be empirically demonstrated.
But what is already demonstrated is that ‘tough on crime’ doesn’t work and may actually result in perversely stimulating a growing cost in the form of incarceration. It just goes to show, being tough on crime doesn’t necessarily mean being smart.