Economics of Policing


Effective policing is critical to society. The police are the most visible demonstration of government’s monopoly on the use of force. Government’s very legitimacy depends on effective and fair policing. Policing is also critical for economic stability in a community. Public safety and the protection of property are the foundations to any successful economy. Finally, policing is a huge focus of government spending. It usually represents the largest piece of cities’ and towns’ operating budgets. Local leaders and their stakeholders should pay closer attention to the economics of policing. Except where mentioned, the statistics in this post come from the Bureau of Justice Statistics.

Scope of Policing in the U.S.

There are about 700,000 police officers in the U.S. Two thirds are at the local level. Two thirds of local officers are with city departments. The rest are in sheriff’s departments and special districts like transit, university and school district departments. Three fourths of the nation’s police departments have 25 or fewer officers. Fully one-third of all officers work in large forces with 1,000 or more sworn officers.

Context Before the Great Recession

A 2013 report by the Justice Policy Institute reviews trends in policing in the decades before the Great Recession. To summarize, the public response to rising crime rates in the 1970s and 1980s took the form of more resources devoted to policing and new policing policies. Beginning in 1994, the federal government provided funds for local departments to recruit and train 100,000 additional officers in community policing tactics. This strategy coincided with zero-tolerance policies and included among other initiatives, the war on drugs. The result was a dramatic increase in police encounters, arrests and incarcerations. Over the same period, there was a dramatic decrease in violent crime. Reported incidents fell almost 50 percent from early 1990s to the Great Recession.

Conflicting Evidence of the Recession’s Impact

Nationally, total spending on police by local governments continued to grow through the Great Recession. Total spending was $72.6 billion in 2007 and had increased to $84.0 billion by 2012. These national totals contradict survey research and other anecdotal reports from departments at the time. The Police Executive Research Forum began surveying departments in 2008 to assess police department responses to the recession. For various reasons, local government budgets felt the effect of the recession three years after the national economy hit bottom. In 2010 half of the departments being surveyed were still facing reduced budgets and 40% planned to have additional cuts in 2011. This was two full years after the official end of the national recession.

It may be that some of the media stories and survey studies at the time were capturing what were actually reductions in the rate of growth in police spending in some communities. Another possibility is that the uneven impact of the recession caused dramatic cuts in some communities but only slowed spending increases in others. There were dramatic examples of departments in poorer communities reducing their forces.

Nevertheless, across the U.S., police departments reported several other strategies they were implementing to manage budgets after the recession. These included: prioritizing calls and not responding to low-level crimes, hiring private security officers for some services, civilianizing portions of the police process, mergers of local departments and sheriff’s offices. It may be that departments faced with several years of lower than historic budget growth were increasingly scrutinizing their spending.

Future Efficiency and Effectiveness Concerns

Regardless of whether a given local department had to actually cut its budget or just slow the rate of growth, several challenges remain for local leaders who will be making the decisions on police policy and spending. Three in particular include:

Continued competition for talent among some departments and with the private sector. Talent is the number one issue when it comes to more effective policing. The key to effective use of that talent is better, ongoing training and better human resource management, particularly supporting officer health.

Improving community relations. Communications, engagement and transparency are perhaps some of the best ways to build a baseline and track police effectiveness and efficiency. Citizen involvement and departmental transparency help improve public perception of policing.

Better use of technology is a third key efficiency and effectiveness focus. Recent work by the RAND corporation highlights that the human factor in technology is an essential gap. Needs include better information on best practices, training on the use of technology including social media, and procurement and deployment of new tools.

All three issues are key drivers of police spending. They will need to be addressed by local leaders who want their governments and police forces remain effective and be even more responsive to unique community needs. There is a role for analysis in each area. This includes a focus on efficiency that goes beyond typical pay and pension debates that surround police finance. Long-term sustainability of effective policing requires better police practices that address community needs, fairness and efficiency.

What’s Next

Next week, we will highlight some of the most interesting local government finance trends and studies we discovered over the last month. In the meantime, let us know how we can help you nurture your community through better decisions.

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