Chapter 7: Criminal Justice Institutions, Police, and the Common Pool
INTRODUCTION Chadwick’s quest to inculcate utilitarian principles into economic policy at all levels revolved, as we have seen, around palliatives for ‘market failure.’ And indeed, Chadwick envisioned market failure everywhere. The problems of decreasing costs and natural monopoly required, in his view, nationalization and franchising of the railways to private contractors (Chapter 4). Other types of market failure – high and asymmetric information costs and negative externalities – required urban franchising of local businesses including funeral supplies and the nationalization of graveyards (Chapter 5). Yet another possible form of market failure applied to the ‘market’ for the provision of crime prevention and judicial services. These services or parts of them were riddled with what it called the common pool problem – a problem whereby the property rights to some resources are non-existent or poorly defined, so that by default, anyone may use the resource, up to some limit of course. The result in many cases is the ‘overuse’ of the resource and its total or partial destruction. Chadwick, who was concerned with crime and justice issues throughout his career, addressed a particularly modern problem in that failures with the contemporary criminal justice system are legion. Economists have sought to analyze criminal behavior (Becker 1968; Becker and Stigler 1974; Stigler 1970), economic efficiency in the law (Ehrlich 1973), and a host of matters relating to crime (drugs, gun control, and so on). A myriad of issues and problems are still in debate. While the mass of this literature has focused on crime deterrence and...
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