The Political Economy of Policing

Tate J. Fegley

Major Professor: Christopher Coyne, PhD, Department of Economics

Committee Members: Peter Boettke, Peter Leeson

Online Location, #D150
April 30, 2020, 09:30 AM to 10:30 AM


This dissertation applies the concept of economic calculation to the provision of security and the implications of the presence or absence of institutions that enable its use. The inability of state police agencies to engage in economic calculation leads to several issues that are explored.

Chapter 1 contrasts the institutional differences between public policing and private security and the implications these differences have for the implementation of the community-oriented policing philosophy. Chief among these differences is the ability of private security to use economic calculation to determine whether the allocation of security resources resulted in an outcome in which the costs of those resources were less than the benefit they created in terms of losses prevented or increased capital values. Government police departments, being unable to engage in economic calculation, have to employ some other means to evaluate performance. The lack of ability to engage in calculation presents a real barrier in determining whether police are producing the basket of outputs most desired by the community.

Chapter 2 further explicates the implications of police bureaucracies’ inability to engage in calculation, arguing that a number of contemporary issues in policing stem from this muted capacity to negotiate trade-offs among competing ends desired by the heterogeneous consumers of policing services. These issues include the trade-offs between civil liberties and security, the use of force and police effectiveness, and police officer compensation and misconduct. Without the institutions that enable the ability to engage in economic calculation, the optimal trade-off between these competing values cannot be determined.

Chapter 3 analyzes the political economy of police unions and the privileges they obtain for police officers, showing how these privileges undermine almost every avenue for holding police officers accountable. It is argued that these protections serve as compensating differentials allowing municipalities to pay police lower monetary wages, but undermines officer accountability. The main implication for policing reform is that greater officer accountability will come at the cost of higher wages.