ABSTRACT
This chapter reviews some recent results on the economics of crime and punishment. In particular, a dynamic extension of Becker’s static setup is proposed. To determine the optimal amount of enforcement one has to know the damage caused by the offenses and the response of offenders to changes in law enforcement, the cost of apprehending and convicting criminals, and the impact of the nature and the amount of punishments meted out. The ‘upper equilibrium’ is approached from south-west and north-east, respectively. This means that for a sufficiently large initial number of offenders the corresponding ‘optimal’ law enforcement rate is relatively high compared with the equilibrium enforcement rate, but gradually decreases. During the past several years, law enforcement in illicit drug markets has developed to growing field in economics and planning. Baveja et al. analyze enforcement programs of finite duration that minimize the total costs of crackdown, subject to constraint that the market is eliminated at the end of the program.
