Efficient Methods Of Reducing Crime

My previous post may have left some wondering, "If spending more of public funds to catch criminals cannot reduce crime, what will?" To answer this question, we will have to understand why organized crime exists in Kyrgyz Republic, the relevant dimensions of this enterprise, and the organizational structure of the criminal enterprise.

The economic theory of crime suggests that organized crime arises when (1) government fails to provide basic protection and enforcement of law, (2) government exercises excessive bureaucracy, (3) government makes certain goods and services illegal. Generally, it is perceived that organized crime impoverishes the areas that it controls. A careful investigation of the causal link indicates that organized crime does not cause poverty but rather fills the vacuum that the state created by failing to protect citizens and enforce laws. In those conditions, organized crime acts as a de-facto  government by introducing set of rules, enforcing these rules, and collecting fees for their services. Sicilian mafia (for that matter Neapolitan and Calabrian organizations), which was glorified by Hollywood movies and Mario Puzo's Godfather books, had much less romantic upbringing than one may think. According to Professor Anderson, a prominent scholar in the economics of organized crime and mafias, before the Italian unification of 1870, inhabitants of the island of Sicily used private protection services. After the unification, the state's unwillingness or inability to fund centralized enforcement of law led to outsourcing the law enforcement and governance to the private entrepreneurs known as gabelloti. The subsequent mergers of gabelloti under a more efficient organizational structure became what we now refer to as mafia. Mafia or organized crime in Italy in those impoverished areas took on the role of the government, because government had failed to provide social assistance, protection of property rights, and enforcement of legal agreements. They had the local support and improved the living conditions of peasants.

Italy sounds like a distant and irrelevant comparison. A remote mountainous area known as upper Kodori in the border of Georgia and Abkhazia was populated primarily by an ethnic group called Svans. The recent Georgian and Russian/Abkhazian war left that area impoverished, deserted, and effectively worse than it had been before Saakashvilli's attempt to remove Kodori warlord Emzar Kvitsiani. During Shevarnadze's reign over Georgia, the state decided not to meddle in Kodori business as long as Kodori Svan sided with the Georgian government. Effectively, Kvitsiani was the boss of an organized crime group that had the overwhelming local support. According to some estimates about 1/3 of the "Vory V Zakone" in the early 1990s were from that Abkhazia/Georgian overlap regions. One of the reasons for such a high representation of these people in the criminal world has been the fact that Soviet government was unwilling to enforce state laws and prosecute criminals in that area. People in that region had very minimal protection, hence the rise of criminal organizations in that area was inevitable.

Another big reason for the rise of criminal organizations is changing the legal status of certain goods and services. For example, by making alcohol illegal, the US experienced one of the highest crime rates and the rapid growth of criminal organizations during the prohibition period. Professor Jeffrey Miron has the most convincing data and discussion on this matter. Here is the graph of Homicide Rates in the US and the Federal Expenditure to 'fight' the Crime:

 

The graph above shows that the unusual jump in homicide rates came about the same time when the Fed outlawed alcohol and again around 1980's Reagan's war on drugs. I will not elaborate on the mechanisms how these laws led to more crime, but if you are interested you can read Jeffrey Miron's books and articles. Soviet experience around the alcohol prohibition years 1985 to 1987 is another clear examples to this end. I remember as a child that some of our neighbors became active in this business. Brutal fights, knife stabbings, and incidence of alcohol poisoning became quite frequent in my neighborhood (yes, I lived in a poor neighborhood). When the state refuses to extend the law and justice, the private sector steps in to fill that gap. Unfortunately, the only credible way to enforce contracts under these circumstances is the use of brutal force.

So far I have addressed the causes and consequences of criminal enterprise in other parts of the world. What about Kyrgyz Republic? Well, first and foremost, citizens are concerned about the homicide rates. What does the homicide rate look for KG? Here is the graph that I constructed using UN data:

As you can see, the homicide rates are highly correlated with the economic uncertainty and political change. In 1990s, there was a sharp increase in the murder rate as the assets were being divvied up among various criminal groups. In 2005, there was another round of asset redistribution activities with deadly consequences. And of course, though it is not shown in the graph, the recent political turbulence led to massive death toll.

The data suggest that the homicide rate is counter-cyclical, when times are tough the murder rate is higher.

What lessons can we learn from it all? The most efficient way to reduce crime in Kyrgyz Republic is not hunting (scape goat) public enemies but making sure that


TRUST IN LAW ENFORCEMENT AGENCIES
1. Our law enforcement agencies carry out very basic duties such as following their code of conduct, arresting anyone who infringes upon private property, and punishing anyone who commits grave crimes to the full extent of the law. (Here I would advocate that we institute death penalty, but my feeling is that many will not support it. I will address this issue of death penalty in my next entry)
2. Releasing 80% of the law enforcement agents from their duty and start a new hiring process by an independent agency.
3. Reducing the number of militsia but increasing the salary for those who are selected for the job.
4. Creating clear Performance Indicators and rewarding officers for superior jobs.

LEGALIZATION OF PROSTITUTION and DRUGS
5. Legalizing prostitution in order to reduce criminal enterprise's revenue source, and most importantly to provide a better legal protection for young women and men in this sector.
6. Legalizing drugs by following Swedish model. In other words, legalize the sale of drugs but make buyers subject to criminal offense. It will reduce the drug related crimes, reduce drug impurity, bring the industry under public watch and away from criminal underground.

CREDIBLE PUNISHMENT
7. Publicizing the funds allocated to prison system and conditions in the prisons.
8. Address the issue of overcrowding in prisons that tends to further improve the criminal network and skills.
9. Publicly discuss various punishment terms, including the death penalty, for various crimes.

EDUCATION
10. Addressing the retention and improving quality of education for youth in elementary and secondary schools, since these are the ones who are easily recruited by criminal organizations.