The Economics of Crime: Time for quick prosecutions and hangings

Gary Becker, the economist, established the benchmark model for studying crime from an economic perspective. He made the assumption that rationality is behind the act to commit a crime. It does not have to be the kind of hyper rationality of mainstream economics, but if criminals know they can get away with the act they are more likely to commit the crime. In an ad hoc sense, if criminals know that the reward of criminal activity is greater than the cost, they are more likely to steal, which we see in Guyana also leads to gruesome murders.

development watchTherefore, let us outline first some of the possible scenarios involved in the economics of crime. In doing so we can achieve insights into two areas: (i) is the theory applicable to Guyana? (ii) What solutions does the theory propose? A first factor in determining the hours or time spent in criminal activity is the income from criminality. If the expected rewards are great people are likely to commit the crime. Second, hours spent in crime is negatively related to the pay and employment activities available in the legal economy. As expected, as legal opportunities emerge the level of criminal activities will likely decline.

Third, cash flows from sources other than crime and legal employment are also important for determining the hours spent in criminal endeavours. In the case of Guyana, remittances are a crucial source of cash flows and gifts outside of legal and illegal employment. Without remittances Guyana would be an even more dangerous and deadly place.

Fourth, the probability of getting caught during or after committing the act is a deterrent. Before the APNU+AFC government almost no one was being arrested for serious criminal activities. A criminal knew he or she would not get caught and even if caught the records would disappear as happened in several reported cases during the PPP era. This government, therefore, must make sure the accused are arrested.

Fifth, the probability of being convicted after arrest is also an important deterrent. A higher likelihood of conviction increases the cost associated with criminality. As one person noted, this country is blessed with creative and talented trial lawyers. Unfortunately, it has an acute shortage of engineers, venture capitalists, investment bankers, scientists, entrepreneurs and quantitative social scientists. State prosecutors should be given all assistance needed, including DNA science and a 50% salary increase. There should also be fast-track trials of persons recently accused of heinous crimes and robberies. These people must not be locked away in jail for years until trial. In addition, Guyana has a history of evidence disappearing. The longer they spend in the lockups the more likely the evidence will disappear.

Sixth, the expected sentence once convicted is

important in determining the hours devoted to crime. The cost of criminality increases as the severity of the sentence increases. Weak sentences and even pardon of petty offenders tend to send a message the government is not serious about crimes. These reduce the cost of doing crimes when criminality must be a most costly endeavour for the culprit. At this stage in Guyana, I am not certain a life sentence is enough of a deterrent. There has to be a period of quick trials and hangings. Anyone who robs and murders a person must be executed once found guilty. However, I do not support hangings which are not backed by DNA science. The quality of the DNA evidence depends on the skills of the analysts and the reliability of samples. What’s the state of DNA forensic science at Mr Rohee’s forensic lab? Was this lab given all the resources it needed?

Is the cost-benefit crime theory of Becker applicable to Guyana? I think it is with suitable modifications taking into account the historical roots of crimes in post-independence Guyana. My thinking is a few powerful political leaders and some independent activists have allowed and encouraged poor folks to break the rules. In addition, middle class and relatively well-off journalists, opinion makers and activists have glorified poverty in the name of far left-wing activism and protests. Rule breakers such as street vendors and squatters are well-represented by the relatively rich activists and political lawyers. The vendor crisis – once encouraged by a powerful politician of the PNC – and squatting have fairly straightforward policy solutions, yet the relatively rich activists never propose a solution as fast as whipping up a frenzy.

Mr Jagdeo, the ultra-rich politician now in opposition, labels the government as anti-poor for relocating the street vendors who are obviously breaking the rules. As leader of the opposition, he does not see it fit to come up with a plan that can compensate, relocate and retrain illegal street vendors. Instead of the silly proposal in Parliament to pawn the economic sovereignty of the country by selling rice to a hostile neighbour claiming 5/8 of Guyana’s territory, the PPP could also propose a sensible strategy to deal with this crisis that can bring the city up to a state where it could achieve UNESCO’s recognition like Paramaribo.

However, there have been more insidious examples of criminality, protests and lawlessness relative to the vendor problem. This would be the case of the mayhem engineered after the 2001 General Election. The poor masses of the PNC were misled into believing that there were easy solutions to the long protracted economic stagnation of Guyana (a 1.8% real per capita GDP growth rate from 1966 to 2016). The February 23, 2002 jailbreak further deepened the crisis and mayhem on the East Coast and in Georgetown.

The Jagan PPP for some mysterious reason refused to commence the reform of the police system from 1992. By 2002 the Jagdeo PPP made the choice to use extra-judicial means to fight the “political masterminds” who also drew “fighters” from the underworld. The easy way out was sought by establishing a quid pro quo with a once powerful figure in the drugs underworld. The State’s policing capacity was greatly undermined. A deadly boomerang occurred in the execution of a sitting Minister of government. These days it is fashionable to call for an inquiry into half of the actions of the period 2000 to 2006.

As noted above, Guyana has a shortage of several essential skills necessary for development. However, it does not appear to have a shortage of operatives for criminal hires and hits. This goes back to the initial conditions (with deadly path dependence into the 21st Century) established by the kick-down-the-door era of the late 1970s and 1980s. It was also quite easy to obtain contract killers for the spate of violence against businessmen around the 1998 to 1999 period. Why do these executions occur in clusters? Given the relative ease with which this police force under Granger is able to apprehend criminals, the capacity is there to figure out why these killings occurred in clusters.

In terms of solutions, it is obvious to me Becker’s theory provides insights. Essentially the explicit cost of criminality has to be made as high as possible in the short term. Addressing the implicit cost of criminality – employment in the legal economy – will require speeding up the implementation of smart industrial policies and cash transfer systems to the poor. Government officials and those in opposition should demonstrate some modesty in lifestyle so that the value system shifts back to education from iPhones. How gas guzzling Prados and Land Cruisers are consistent with green economic policies?   Guyana will only turnaround when UG makes the right turn.

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