Working Paper: NBER ID: w15877
Authors: Philip J. Cook; John Macdonald
Abstract: Given the central role of private individuals and firms in determining the effectiveness of the criminal justice system, and the quality and availability of criminal opportunities, private actions arguably deserve a central role in the analysis of crime and crime prevention policy. But the leading scholarly commentaries on the crime drop during the 1990s have largely ignored the role of the private sector, as have policymakers. Among the potentially relevant trends: growing reporting rates (documented in this paper); the growing sophistication and use of alarms, monitoring equipment and locks; the considerable increase in the employment of private security guards; and the decline in the use of cash. Private actions of this sort have the potential to both reduce crime rates and reduce arrests and imprisonment. Well-designed regulations and programs can encourage effective private action. \n \nOne creative method to harness private action to cost-effective crime control is the creation of business improvement districts (BIDs). Our quasi-experimental analysis of Los Angeles BIDs demonstrates that the social benefits of BID expenditures on security are a large multiple (about 20) of the private expenditures. Creation and operation of effective BIDs requires a legal infrastructure that helps neighborhoods solve the collective action problem.
Keywords: Public Safety; Private Action; Business Improvement Districts; Crime Prevention
JEL Codes: H44; K42; R38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| private cooperation with law enforcement (K42) | crime reduction (K42) |
| establishment of Business Improvement Districts (BIDs) (R38) | reduction in total serious crimes (K42) |
| establishment of Business Improvement Districts (BIDs) (R38) | relative decline in crime (K42) |
| establishment of Business Improvement Districts (BIDs) (R38) | reduction in robbery (K42) |
| establishment of Business Improvement Districts (BIDs) (R38) | decrease in police arrests (K42) |
| private actions (e.g., installation of advanced security systems) (P26) | decline in crime rates (K14) |