Economic Models of Crime and Punishment
Abstract
Over the last forty-five years, there have been three monumental stories on the national American crime scene: a run up in crime in the 1960s, a move towards a more punitive American justice system starting in the 1970s, and a strong decline in US crime rates beginning in the 1990s. At the center of understanding these three stories lies Gary Becker's pioneering work on the economics of crime. Becker offered a price theoretical model in which criminals are viewed as rational actors seeking to maximize their benefits in choosing certain criminal actions while minimizing their costs. Becker's model has not only shaped academic debate on the topic of criminal behavior since the 70s, but it has also had a powerful impact on governmental policies regarding crime and justice. Most significantly, Becker's work_—with some of its nuance overlooked_—ended up providing intellectual backing to the increasingly punitive and harsh nature of the American justice system, as reflected in the massive increases in incarceration levels and the revival of the use of the death penalty.While Becker correctly predicted that massive increases in incarceration would have a dampening effect on crime, the supporters of this policy have not been attentive to the need to weigh costs as well as benefits in assessing the major prison build-up. Evidence that equal crime reductions could be achieved through targeted social spending merits consideration, since Becker noted that improving the legal opportunities available to potential criminals could be as potent a deterrent to crime as increasing the cost of criminal choices. Furthermore, I review current research in the death penalty debate and argue that—contrary to the positions defended by Becker and many ardent disciples of price-theory— the empirical evidence does not currently support the conclusion that the death penalty as administered in the United States has served as a deterrent to crime.