Incentives for Public Police

"Orange, California, reduced crime by giving the police financial incentives."

Case Study: Paying for Crime Reduction.40 A few years ago the city of Orange, near Los Angeles, started paying its police according to how much crime was reduced. The incentive plan applied to four crimes - burglary, robbery, rape and auto theft. Orange used pay raises rather than bonuses. For every 3 percentage point reduction in the crime rate, the police got a 1 percent raise. The results were encouraging. During the first seven months of the program, the selected crime categories fell by 17.6 percent. Other crimes held steady, suggesting that the police were not merely reallocating their efforts. Among other changes, detectives, on their own time, began sharing information by video-taping briefings with leads for patrol officers on specific beats. The whole force developed a campaign to encourage safety precautions in residents’ homes.

A skeptic might inquire whether the decline in Orange’s reported crime wasn’t due to the financial incentive to "unrecord" crimes. This incentive explains why private-sector businesses use systems of checks and balances as well as monitoring by boards of directors and outside auditors to ensure fidelity. In the case of the Orange Police Department, records were audited by the California Bureau of Criminal Justice Statistics. The bureau found that, if anything, the Orange Police had overreported crime to play it safe.

Wider use of the incentive system developed by Orange would require accuracy in crime reporting. Independent public accounting for crime rates probably would be essential. Another problem is determining baseline performance. Other factors besides activities of the police determine crime rates, so the base point for judging incrementally superior performance would have to be adjusted for population changes, social changes, new court practices and other factors. Neither problem is insurmountable, but both warrant careful attention in practice.41