with contributions from:
James E. Anderson, Christine Brendel, Alejandro Christ, Caroline L. Davey, Christiane Erkens, Rubeena Esmail-Arndt, Petra Guder, Tanja Kasten, Tïmm Kroeger, Philipp Kuehl, Erich Marks, Karla Marks, Melissa R. Marselle, Christine Müller, Jens Narten, Marion Popp, Gerhard Schmalbruch, Tina Silbernagl, Bernd-Rüdeger Sonnen, Stephan L. Thomsen, Sabine Wenz, Andrew B. Wootton, Abdoulaye Zono
Bibliographic information published by the Deutsche Nationalbibliothek
The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at www.dnb.de.
© Forum Verlag Godesberg GmbH, Mönchengladbach.
All rights reserved.
Mönchengladbach 2016
Produced by: BoD - Books on Demand GmbH, Norderstedt
Print layout: Isabell Becker, Claudia Heinzelmann, Karla Marks
Cover design: Konstantin Megas, Mönchengladbach
978-3-942865-55-5 (print)
978-3-942865-56-2 (ebook)
With the current edition of the “International Perspectives of Crime Prevention” the co-editorship of Prof. Dr. Marc Coester turns over to his successor as coordinator of the Annual International Forum, Dr. Claudia Heinzelmann.
We would like to warmly thank Prof. Dr. Marc Coester for his dedicated work in the context of the Annual International Forum of the German Congress on Crime Prevention. Mr Coester made a decisive contribution to the development of the international part of the German Congress on Crime Prevention since 2007. Due to his continuous efforts, it was possible to establish the International Annual Forum as an inherent part of the Congress. Thus a growing international audience was addressed to actively contribute to the debates and to get into contact. For the German Congress on Crime Prevention this extension meant to be able to offer a view beyond the national level and comprehensively participate in the knowledge and experience of other countries. Many of these contributions have been included in the presently available seven volumes of “International Perspectives of Crime Prevention” and are now open to the public of international research, practice and policy in the field of (crime) prevention.
Mr. Coester accepted a professorship for Criminology at the Berlin School of Economics and Law for the winter semester 2014/2015. In 2015, he was elected President of the DBH Association for Social Work, Criminal Law and Criminal Policy. Mr. Coester remains as expert adviser of the German Congress on Crime Prevention and its Annual International Forum. To our delight, a close relationship and the involvement of the experience and scientific expertise of Mr. Coester may thus continue.
The German Congress on Crime Prevention is an annual event that takes place since 1995 in different German cities and targets all areas of crime prevention: Administration, the health system, youth welfare, the judiciary, churches, local authorities, the media, politics, the police, crime prevention committees, projects, schools, organizations, associations and science. The desired effect is to present and strengthen crime prevention within a broad societal framework. Thus it contributes to crime reduction as well as to the prevention and the reduced risk of becoming a victim as well as fear of crime. The main objectives of the congress are:
Since its foundation the German Congress on Crime Prevention has been opened to an international audience with a growing number of non-German speaking participants joining. Because prevention is more than a national concern and should be focused internationally this step seemed crucial. Bringing together not only German scientists and practitioners but also international experts in crime prevention and therefore developing a transnational forum to foster the exchange of knowledge and experience constitutes the main focus of this approach. To give the international guests a discussion forum, the Annual International Forum within the German Congress on Crime Prevention was established in 2007. For non-German guests this event offers lectures in English language as well as other activities within the German Congress on Crime Prevention that are translated simultaneously. International guests are able to play an active role by presenting poster or displaying information within the exhibition.
This eighth edition of “International Perspectives of Crime Prevention” includes the outcomes of the 9th Annual International Forum which took place within the 20th German Congress on Crime Prevention on the 8th and 9th of June 2015 in Frankfurt/ Main and gathered together about 3.000 people from the field of crime prevention in Germany and worldwide. The main topic of this congress was on the economics of crime prevention. We publish a short version of the Congress-expertise, written by Prof. Dr. Stephan L. Thomsen, in this book, as well as the concluding “Frankfurt Declaration”.
The GIZ (Deutsche Gesellschaft für internationale Zusammenarbeit GmbH) was very much engaged in this Congress. Deputy Director General Sectoral Department Karin Kortmann contributed to the opening panel with a short overview about the challenges for the work on prevention worldwide. Several initiatives of german development cooperation presented their activities in the frame of violence prevention. Examples of the use of (social) media in this field provided new insights and impulses. We thank the GIZ for their inputs and for providing us with English print versions of their sessions, which are included here.
We would also like to thank the Glen Mills Academie Deutschland e.V. for their cooperation and for again inviting prominent speakers informing the Congress-audience about the exemplified US-Juvenile Justice Reform. Two articles of this book are dedi-catedtothistopic.
All articles in this book reflect worldwide views on crime prevention as well as the current status, discussion and research in crime prevention from different countries.
We hope to find a broad audience, interested in the upcoming events of the Annual International Forum as well as the German Congress on Crime Prevention. For more information please visit our website at http://www.gcocp.org.
Claudia Heinzelmann and Erich Marks
1. Introduction
The report on the economic analysis of costs and benefits of prevention should initiate and motivate the discussion about these issues at the 20th German Congress on Crime Prevention. Although economics and economic aspects have been part of the scientific analysis of crime prevention in the international community and literature for a long time, this is a new - and to some extent - unfamiliar perspective in Germany. The choice of the topic is, however, not really a surprise given the development and evolution of the congress over the two decades of its existence.
While in the 1990s, the focus of the annual congresses lay on the initial and basic sensitization and information about crime prevention by offering a forum for exchange of experiences, ideas and practices, around the turn of the century the scope of topics moved to questions of crime prevention for the society as a whole. With varying emphases, topics in crime prevention at the municipal level (e.g. 1995, 1996, 1998, 2004), in prevention of violence in sports (e.g. 2000, 2006), in prevention of crime against immigrants (e.g. 2003, 2009) and frequently and regularly on the protection of children and youth (e.g. 2005, 2007, 2010) were at the center of the congresses over the years. Besides the intensive discussion and elaboration of these subject matters, the congress started already in its early years to systematically collect and provide data, evidence and information on many aspects of crime prevention. Starting with the approaches on the documentation of results and experiences in 1997, already in 2001 the report of the congress at Dusseldorf set out the principles of evaluation of crime prevention. At the same time further sources of information were presented.
The choice of the topic in 2015 has to be seen in this tradition: The economic analysis of prevention, i.e. in particular the elaboration of their impacts and benefits while taking account of the associated costs, should contribute to the understanding of effective and efficient prevention, but will also be helpful for its reasoning. Of course, the economic discussion and analysis is not detached from the experience and knowledge of the diverse, directly and indirectly contributing actors to the field of crime prevention and their specialized disciplines. It should rather be seen as a valuable addition.
The report therefore aims to give an idea of the possible contribution of economic analysis of crime prevention and provides an overview. By doing so, it should motivate the discussion and an intensified interdisciplinary dialogue about approaches, practices and theories and make them understandable across disciplinary languages. This may thus enable an informed discourse involving all interested actors.
2. Economics of Crime
Why should economics study (crime) prevention? As a first reason, crime leads to considerable economic losses for the individual and the society as a whole. Examples include the tangible and intangible losses of crime victims, the public and private expenditure for prevention, or the public spending for police, judiciary, penitentiary, and probation assistance. The choice of the relevant means for optimal prevention and combating of crime is therefore a traditional economic allocation problem: scarce public (and to some extent private) resources have to be allocated to enable the most efficient possible use.
Already in the 1960s, the economist and later Nobel laureate Gary Becker began with the transfer of economic principles of rational choice theory to the area of crime. It was not his primary goal to develop a theory of criminal behavior, but he was interested to answer the question of minimizing social harm resulting from crime. To achieve this purpose, the government has to choose about the intensity of sanctions and threatening or deterrence instruments under consideration of the available resources (and the other public commitments).
The determination of the optimal level of prevention is then carried out based on a mathematically formulated social loss function. It shows that by optimal choice of the deterrence parameters, i.e. in particular probability of getting arrested or convicted and the expected strengths of the penalty, social damage can be minimized efficiently. Efficient so, because crime prevention not only reduces the damage, but also incurs costs.
Minimizing the social loss function denotes the optimal level of acceptable social loss due to crime or - vice versa - the tolerable level of crime in society taking into account the possible avoidance costs. In short, because the social loss function is defined upon the social preferences, it defines the socially tolerable levels of crime. Conversely, it means that the benefit of approved criminal offenses and crimes equal the saving of costs that would have to be spent for effective prevention and deterrence.
The high content of persuasion but also the restrictive assumptions of the theoretical model and its extensions have led to a large number of empirical studies trying to quantify and validate or invalidate the assumed and derived relationships and their implications. Nevertheless, the economic model of crime clarifies that crime is a “normal” social phenomenon. Its complete elimination should be sought neither to be possible nor affordable by the state.
Since the model is formulated in very general fashion, the determination of the opportunity cost in accordance with the respective social welfare function remains an empirical question. The empirical quantification of the related figures has become a major topic of empirical economic research. Economic and in particular econometric methods are suitable for studying and identifying causal dependencies: conditional on the available data the statistical-mathematical formulation and estimation allows to obtaining exact and interpretable quantitative effects. These are usually unambiguous in their direction and magnitude given the underlying model and precision of the estimation. The economic mindset - expressed in the theoretical, statistical and mathematical tools - is therefore particularly suitable to model and analyze the relationships between crime and the economy.
3. Reasons for Cost-Benefit- and Cost-Effectiveness-Analyses
In 2013, there were almost 2.4 million robberies conducted in Germany according to the police crime statistics (Federal Ministry of the Interior, 2014). In the same year, nearly 47,000 cases of crimes against sexual self-determination were registered. The number of the reported murders and homicides was 2,122 in 2013.
What is the level of damage of these offenses to society? And is the damage caused by murder and manslaughter greater than the damage caused by the thefts? How much should the state spend to curb crime? Do investments in early childhood education have a greater preventive effect on crime prevention than investments and expenditures for the correctional? Should offenses than be convicted by fines more often and not by imprisonment?
An objective answer to these questions can only be given when all costs or benefit-cost relations of the action of interest and the alternative use of the available resources would be compared in a single unit. For this assessment, economics has developed the methods of cost-benefit analysis and cost-effectiveness analysis. If they are carefully conducted, their use and results can contribute to a more objective and evidence-based practice in the design of policy and the societal debate about crime prevention.
Especially in the Anglo-Saxon world, cost-effectiveness analysis and cost-benefit analysis have been used to evaluate public interventions and programs for many decades. The basic reasoning for their use is quite simple: any government intervention leads to changes in the behavior of the (economic) actors and, thus, has a direct impact on the present and especially the future prosperity and wealth of a nation. In face of scarce public resources, these should be distributed in the most efficient manner to the various alternatives of public spending (and public priorities). These alternatives include all imaginable (and sensible) policy interventions that have a welfare-enhancing effect.
Since the mid-1990s, cost-benefit analysis and cost-effectiveness analysis have been conducted for the evaluation of judicial measures, but have also been used for the evaluation of prevention in the Anglo-Saxon countries, in particular in the United States and the UK. In contrast, comparable analysis or even the basics of an “evaluation culture” are almost non-existent in Germany up to date. With the only exception of individual teams of researchers who have studied selected questions of the economics of crime in the past 15 years, there is lack of both the systematic analysis but also a continuous economic dialogue in criminology and prevention. This is not only surprising but appears to be a serious omission, as economic considerations can contribute to an objectified discussion on the use and allocation of limited public (and private) resources.
Why should the damage of crime or its prevention be economically measured, i.e. in monetary units? Economists, however, cannot be surprised by this question. The major subject of economics is the allocation or efficient distribution of scarce available resources to the needs of society. To ground the associated decisions on a well-informed basis, the conversion of the costs and benefits of public as well as private interventions into a single dimension provides a sensible means for comparison. Moreover, in order to enable the comparison across different fields of action, monetary values contain a further important advantage.
They allow, firstly, for comparison of the relative harm or suffering of the individual, and secondly, for comparison of the aggregate loss or the aggregate suffering of the society as a whole due to crime with those of other social evils. Thirdly, monetary values are a necessary precondition for the implementation of cost-benefit analyses for consideration of alternative preventive interventions. The economic instruments thus represent an approach to make the advantages and disadvantages of certain programs or interventions comparable with alternative uses (including the option to do nothing).
4. Cost-Benefit- and Cost-Effectiveness-Analyses: Aspects of Implementation
Although there are a number of different approaches available to the economic evaluation of interventions and activities, cost-benefit analysis and cost-effectiveness analysis have become the most common methods. The main difference between the two approaches is that cost-effectiveness analysis considers only the cost of the activity in monetary values but not its impact. The cost-benefit analysis, in addition, evaluates also the effects (i.e. the benefits) of the program or intervention in monetary values.
The cost-effectiveness analysis relates the cost of a specific measure to a pre-specified outcome. Hence, cost-effectiveness expresses how much „input” is necessary in order to achieve a particular result (or „output”). It thus establishes a first simple link between effort (e.g. in thousands of dollars or euros) and the returns. The cost-benefit analysis extends the cost-effectiveness analysis by also expressing (or translating) the program results in monetary values. With regard to crime prevention, it therefore allows to determine how much harm avoidance can be achieved (expressed in euro) per euro spent. It thereby clarifies, how efficiently (or economically) a certain goal can be reached. Efficiency is expressed by the benefit-cost ratio.
The approaches and the tools that have been developed for the conduction and implementation of a cost-effectiveness analysis or a cost-benefit analysis in the international scientific community over the last decades require the processing of the following six steps in application:
Here, steps 2 and 3 in particular, i.e. the determination of program effects and the obtaining of estimation results as well as the quantification of the associated benefits and costs in monetary terms, require - in addition to suitable data - an extensive and qualified scientific expertise.
5. Estimation of the Program Impacts
A fundamental precondition for the validity of a cost-benefit analysis is first to answer the question, whether the project or program works. This means that the program‘s impact has to be estimated in relation to the situation that would have occurred in the absence of the program, i.e. the causal effect of the program has to be identified (via impact analysis or evaluation). Without a causal evaluation and knowledge of program success no meaningful cost-benefit analysis can be carried out.
For a meaningful evaluation of the program impact, first of all the outcome of interest has to be defined clearly. This outcome variable should be based on the program objectives, i.e. it has to operationalize the purposes and targets of the intervention quantitatively. The outcome variable is of fundamental relevance since it is the basis for the interpretation and valuation of the potential benefits. For the evaluation of the impact it is not important whether a change of the outcome of interest would have occurred even in the absence of the program. The causal impact is the change of the outcome that is solely due to the program or intervention, i.e. the additional success or failure.
The fundamental evaluation problem arises from the fact that the additional success due to the program (i.e. the treatment effect) is not directly observable. Since every individual situation can be observed at the same time only once, and thus only in a particular state (for example, the number of car thefts in the region x in the period y), the difference between the outcome of the program (treatment) and the outcome without program (control) cannot be observed.
Hence, the causal effect of the program on the outcome of interest cannot be quantified directly. Therefore, the main problem at the core of each (microeconomic) impact analysis can be seen in the absence of data on the counterfactual situation (i.e. the situation without the intervention). In order to solve this problem and to estimate the effect of the program, the literature suggests a number of different evaluation methods. A group of methods that has gained particular interest are so-called social experiments. They randomly assign the observation objects into a treatment group and a control group, comparable to a laboratory experiment. When carefully implemented, we can assume that the random allocation (randomisation) produces the correct counterfactual, and therefore bias of the results due to self-selection can be ruled out. Since a random assignment is not always possible, the so-called quasi-experimental methods have achieved a likewise high attention. They reproduce the experimental situation under certain assumptions and by use of statistical or econometric methods.
The identification and correct estimation of program impacts as the basis for the cost-benefit analysis is very complicated and requires to taking the scientific standards into account. Any bias or deviation of the estimated effects from the true effect will be translated (and maybe exaggerated) in the subsequent assessment of the monetary values in favor or to the detriment of the real benefit-cost ratio. This can lead to severely biased implications. In order to ensure a thorough evaluation of projects and programs, therefore, they should be planned already before the start of the implementation of activities. This ensures a meaningful economic and scientific monitoring, and the impact estimates are more likely to be achieved in reasonable time and with acceptable effort.
6. Assessment of Costs
The third step, the estimation and assignment of monetary values to program benefits, is the most difficult within a cost-benefit analysis. It should be noted that costs and benefits have an inverse relationship: the costs of crime correspond to the benefits to society caused by preventing or reducing the crime. To ensure a correct assignment of benefits, those who bear the costs of crime have to be identified accordingly. In addition, both the tangible as well as the intangible costs have to be taken into account.