Fiscal Incentives in Law Enforcement

Abstract

In recent years, numerous observers have raised concerns about “policing for profit,” or the deployment of law enforcement resources to raise revenue rather than to provide public safety. However, identifying the causal effects of fiscal incentives on law enforcement behavior has remained elusive. In a regression discontinuity design implemented on traffic citation and accident data from Saskatchewan, Canada between 1995 and 2016, a fiscal rule reducing by 75% the share of traffic fine revenue captured by the province in towns above 500 in 1996 population is associated with increased rates of accidents, accident-involved vehicles, accident costs, and accident-related injuries in towns just above this threshold, relative to towns just below the threshold. Further, cited drivers in towns just below this threshold are given fewer days to pay their fines and are less likely to pay their fines on time, leading to higher risks of late fees and license suspensions. These findings suggest that fiscal incentives can indeed distort the allocation of law enforcement effort, with distributional consequences for both public safety and economic well-being.