Controlling Crime in New Zealand

Cathy Buchanan and Peter R Hartley

May 1996

Executive summary

Crime has increased significantly in New Zealand over the past 20 years. New Zealand now has one of the highest burglary rates in the developed world, higher than the United States, Great Britain or Australia.

Many influential criminologists attribute increases in crime to poverty, unemployment, genetic defects, psychological problems and dysfunctional families. Recent criminological theories acknowledge that criminals have some control over their behaviour, but these theories persist in the search for biological, psychological, and sociological factors that make certain children destined to become criminals.

Economists believe that most people act rationally most of the time. Most people respond to expected costs and benefits. Criminals are no exception, though they may value some costs and benefits differently from non-criminals. Crime can be explained using a 'supply and demand' framework similar to that used for other goods and services. Criminals 'supply' crimes and other citizens 'demand' protection from crime. The amount and type of crime occurring in a given place depends on the 'price' of the crime. The 'price' is determined by the expected benefits to the criminal (both monetary and non-monetary) and the expected costs of being caught, convicted and punished.

By insisting that criminals choose to commit offences, the economic theory of crime recognises the moral status of criminals and thus accords them scope to become rehabilitated into society with dignity. The economic model of crime implies that people will be deterred from committing crimes if the expected costs exceed the expected benefits. The expected cost (or penalty) inflicted by the legal system is determined by the probability of conviction multiplied by the punishment once convicted. Other factors that influence expected costs include social attitudes to crime, personal values and the alternative legitimate work opportunities available to a potential criminal.

Criminals tend to be less risk-averse than non-criminals. Increasing the probability of capture and conviction is likely to yield a greater reduction in crime than a proportionate increase in the size of penalties. Certainty of punishment is crucial to effective deterrence.

Crime in New Zealand has increased because the probability of receiving substantial punishment has decreased. Crime will be reduced if the probability of capture and conviction is increased along with the size of penalties.

Psychological problems, a poor education, and a bad upbringing are associated with criminality because possession of these traits makes it difficult for a person to obtain legitimate employment. A person who cannot obtain a legitimate job that is more attractive than a life of crime may well choose the latter. Furthermore, some people, particularly juveniles, whose time is not occupied in employment, will use their leisure hours seeking thrills through criminal behaviour.

There is no fixed size criminal class. Rather, people engage in and desist from criminal activities depending upon their opportunities in the legitimate labour force.

Government policies that exacerbate unemployment (such as minimum wage laws) and deny basic education to many (through tolerance of inferior government schools) may contribute to high crime rates.

Welfare programmes that do not require labour market participation by able-bodied people may contribute to crime by providing a base income to unemployed individuals. Some of these people supplement their welfare earnings through property theft.

The need to support expensive illegal drug habits may also contribute to high property crime rates. Drug addicts may benefit more from theft and burglary than non-addicts because addicts have a greater desire for immediate cash to support their habit.

The economic model of crime implies that fines should be used whenever possible and that incarceration should be a punishment of last resort. Modern methods of electronic surveillance make it possible to punish criminals using 'house arrest'. Offenders under house arrest wear a bracelet or other device that emits a radio signal. The signal is monitored by a central computer that tracks the offender's movements at all times. Offenders are only allowed to be at home or at their place of employment. They continue to work, and they pay for the cost of being supervised. Private firms can be used to monitor the electronic surveillance equipment. Violations of the terms of house arrest would be reported to the authorities by the private firm.

House arrest avoids many of the problems associated with incarceration, including the fact that prison is an excellent school for training criminals. When people are in prison, they are losing time that could be spent gaining work experience. Economic studies have shown that work experience is crucial to increasing labour market earnings. Criminals under house arrest need not lose work experience, as they can continue to work while being supervised.

The use of a limited number of private prisons is currently being considered in New Zealand. More prisons should be privatised and run under competitive tender.

Private firms should be allowed to employ inmates inside prisons, as is done in the United States. Prisoners could assemble furniture, handle airline and hotel reservations, and perform other tasks suited to a prison situation. Firms could bid for the right to employ prison labour and would be expected to pay the market wage for labour of the quality, and with the characteristics, found in prison. A portion of each prisoner's wage would be kept to pay the cost of room and board in the prison. Upon release from prison, many former inmates in the United States have found permanent employment with the firms for which they worked while incarcerated.

New Zealand's Bill of Rights Act 1990 appears to have made the capture and conviction of criminals more difficult than it was previously. A study should be undertaken to determine how the Act could be amended in order to restore reasonable police powers to question suspects and to gather evidence of criminal activities.

The Children, Young Persons and Their Families Act 1989 has made it more difficult for police to catch juvenile offenders and for the courts to punish them. The Family Group Conference system of dealing with young offenders appears to be very expensive, and it has not reduced juvenile crime.

An external and independent evaluation of juvenile justice in New Zealand should be undertaken. Emphasis should be placed on the costs of the current system, as well as its benefits. Amendments to the Children, Young Persons and Their Families Act should be considered in order to increase the probability of significant punishment for juvenile offenders. If the expected penalty for crime is high, young people will be deterred just as older people are.

The police should only pursue criminal investigations that require their special training. Many traffic offences could be handled by private firms that monitor automatic devices such as speed cameras and red light cameras. Furthermore, police should concentrate more of their efforts on solving property crimes and less on intervening in domestic disputes.