About Nick: i am an economist based in malaysia. I write about development economics, while sneaking in a pop culture reference or two.

Fighting Crime with Economics

Published in The Edge Malaysia, 18-24 August 2013.

A friend recently implored me to watch the 2002 futuristic-themed movie “Minority Report” in which Tom Cruise stars as a detective in a special police unit designed to prevent murders from happening by arresting murderers before they actually commit their murders, guided by the pre-cognition powers of three uniquely-skilled individuals. While I tend to err on the side of prevention rather than cure, I found the ethical dilemma interesting – can you arrest someone for something they have yet to do but you know they will do? Thus, is something a crime because of intention or because of outcome? Personally, I am led to think that punitive measures should be based on outcomes.

I think there are many parallels between this notion of prevention and cure of crime and the state of crime in Malaysia, as well as the government’s efforts to fight crime via, for instance, the Crime National Key Result Area (NKRA) in the Government Transformation Program (GTP). On the PEMANDU website, the GTP lists a host of promising initiatives by which it intends to reduce crime. The information can be readily found on the website and thus, I will not repeat it here.

However, as an economist, or economist-in-training rather, I am somewhat puzzled and concerned over the absence of any mention of improving economic realities in the fight against crime. It seems strange that the initiatives under the Crime NKRA are more focused on fighting, perhaps even preventing, crime at the ‘outcome’ level rather than at the individual level. Rather than preventing individuals from turning to crime, the initiatives seem to focus more on preventing criminals from committing crime. I understand the need for the ‘omnipresence’ of the police and the need to whiten black spots, but surely some care must also be given to the prevention of individuals from turning to a life of crime.

I do not believe that criminals are criminals simply because of some arbitrary genetic makeup or simply that they want to cause harm and hurt to innocent folk. Some do, certainly, but to generalize all criminals into evil anarchists is intellectually dishonest. While human beings are far from being homo economicus – completely rational beings – I believe that human beings are not entirely irrational either. A sizable chunk of people turn to crime, specifically blue collar crime, because they have weighed the returns they get from crime against the returns they may get from other forms of income generation, and find that crime provides them the highest returns. In such limited circumstances, where the need to survive is a day-to-day concern, it is straightforward to see why individuals turn to crime from an economic perspective (though not necessarily a moral one).

That said, I am not defending the perpetrators of crime. If a person commits crime – blue-collar or white-collar – that person should be punished accordingly. However, in the battle against crime, I think it is imperative that we attempt to understand why people choose to commit crime. Understanding these reasons can help to guide policy in terms of preventing crime at the individual level, rather than at the criminal level. I question, thus, why there is a lack of focus in the Crime NKRA initiatives on tackling this side of the issue.

A potential response to my query is that these issues are dealt with via the Economic Transformation Programme (ETP) and the Raising Living Standards of Low-Income Households NKRA in the GTP. If the ETP raises the overall income of Malaysians and the GTP helps to raise the living standards of low-income households, then surely that would mitigate some of the concerns of a lack of economic opportunities vis-à-vis those who commit blue-collar crime. This is a little simplistic. While the ETP does create some low-value-added jobs, its focus is to create high-value added jobs. It is not clear to me that this directly translates to increasing economic opportunities for the people more likely to commit blue-collar crimes. Without careful and thorough deliberation on the policies of income distribution moving forward, Malaysia’s income inequality gap, already substantial, may grow even further which may heighten the incidence of crime.

Credit must be given to the Low Income Household NKRA for attempting to implement initiatives such as the 1AZAM Programme which, under the GTP 2.0, will place greater emphasis on urban areas. However, the PEMANDU website states that it will be more stringent in the selection of 1AZAM participants, giving priority to the extreme poor and poor households that have not received any income-generating assistance and to participants from districts with a disproportionately small number of 1AZAM participants. While I fully understand that resources are scarce – literally the first lesson of economics – I am curious to see if there is a way to be less stringent and more inclusive in the selection of 1AZAM participants. One way could perhaps be to be more targeted and granular in determining places of emphasis, particularly in urban areas. I would conjecture that focusing on improving economic opportunities for the poor or extreme poor in lower-income areas surrounding highly affluent areas could go some distance in the fight against blue-collar crime. To sharpen the analysis, it would be interesting to find out – based on the successful arrests of criminals – what the correlation is between where the criminals live and where they committed their crimes.

Coming back to the Minority Report, I am not convinced that the best way to fight crime is to prevent criminals from committing crime but rather to prevent individuals from turning to crime. After all, if we assume that nobody has special pre-cognitive powers, then we cannot hope to know who will attempt to mug us while we are walking down the street. And we certainly should not engage in profiling to declare a person as a potential criminal. What we should do, however, is to prevent individuals from turning to crime. As an economist-in-training, call me biased, but I believe that the most optimal way to do that is to improve the economic opportunities for the lower-income groups. This then reduces the considerable financial incentives and increases the opportunity cost of turning to crime.

Shocking Our Way Out of the Middle-Income Trap

On Moving Forward