The Social Provision of Punishment and Incarceration

• DOI: http://doi.org/10.1111/ajes.12197
• Author: Daniel J. D'Amico
• Published date: 01 November 2017
• Date: 01 November 2017

The Social Provision of Punishment

and Incarceration

By DANIEL J. D’AMICO*

ABSTRACT. Standard economic theory proposes that public goods

(equally available to everyone) will be underprovided by private

markets. Individuals can benefit without having to pay, so there is little

incentive to invest or manage resources efficiently. The punishment of

criminals is an example of this, since everyone in a society benefits

from reduced crime whether they pay to apprehend criminals or not.

On that basis, it is widely presumed that governments must provide

criminal justice services, including prisons. But the evidence in favor of

that view is ambiguous. Stateless societies throughout history have

found ways to maintain public order without ever building a prison.

Nations with adequate social safety nets and a high degree of equality

are also likely to rely on alternatives to incarceration. Strong forms of

public goods theory, when applied to punishments and prisons, are

shown to be false, since crime control does exist without a centralized

state. Furthermore, the available evidence suggests that centralized

government provision and management can also suffer inefficiencies

from overproduction. Only comparative institutional analysis can speak

to the efficiency potentials of punishment, wherein the costs of

underproduction are assessed against the likely consequences of

overproduction.

I. Introduction

The United States quintupled its prison population during the last few

decades of the 20

th

century. With nearly 2.3 million inmates and 710

prisoners per 100,000 capita, the United States in 2012 was the world’s

leader in incarcerations. Prison growth also transcended U.S. borders,

as the prison population of most nations grew during similar periods

*Lecturer in Economics, Brown University. Associate Director, The Political Theory

Project. email: Daniel_Damico@brown.edu

American Journal of Economics and Sociology, Vol. 76, No. 5 (November, 2017).

DOI: 10.1111/ajes.12197

V

C2017 American Journal of Economics and Sociology, Inc.

(Walmsley 2003). Furthermore, the effects of imprisonment in many

countries have been unequally concentrated upon youngand poor eth-

nic minorities. These trends have been collectively labeled “mass

imprisonment” (Garland 2001). Many commentators argue compel-

lingly that reforms are needed to limit the scope of what is sometimes

called the “prison-industrial complex.”

But, if mass imprisonment is perceived or presumed to be inefficient,

several questions arise. What does socially optimal punishment or

incarceration entail? What are the proper functions of imprisonment,

and how is performance to be assessed? What is the proper role of gov-

ernment in the provision of punishments and prison services? Finally,

which feedback processes assure optimality?

The thesis of this article is that services to enhance public safety may

not be optimally provided if their financing and management are cen-

tralized. Centralized bureaucracies foster systemic incentives that con-

tribute to predictable forms of failure (Tullock 1965; Niskanen 1968).

The evidence suggests that mass incarceration correlates with the

growth of centralized criminal justice bureaucracies. In practical terms,

limiting the growth of the prison-industrial complex may require devel-

oping strategies to decentralize the management of punishment institu-

tions. Such is counterintuitive, as the centralization of public

bureaucracies is the typically proffered response to inefficiencies. The

issue here is not whether privatelyoperated prisons are more efficient

than prisons run by the government, since private facilities are still

financed by centralized government. Theissue is whether centralization

of incarceration by government is a necessary part of providing public

safety. Fair and optimal punishments rather than prison services per se

are the proper vantage from which to think about public safety as a

public good.

Most citizens living under stable political regimes take for granted a

criminal justice system replete with legislature, police services, a judicial

system, and prisons. Similarly, social theorists across disciplines pre-

sume such services are properly conceptualized as “public goods.”

Whereas most non-economists view the punitive roles of government

via their normative commitments, many economists use public goods

theory to explain the need for centralized stateaction in terms of certain

logistical shortcomings inherent to voluntary arrangements. Those

The American Journal of Economics and Sociology1108