Archive for February, 2010

Incentives in the justice system

Monday, February 15th, 2010

It was interesting to see fairly prominent coverage of the Conservative party’s latest proposals for criminal justice reform on page three of today’s Financial Times. The main goal of the proposals is to improve the cost-effectiveness of the criminal justice system. The article reports that the system today costs around 2.5% of gross domestic product each year (a higher per person level than the US or any EU country) and yet is so ineffective that nearly seven out of ten people are back in prison within two years of their release.

The Conservatives’ key proposal is for the private and voluntary sectors to take over the post-prison rehabilitation of released prisoners who don’t pose a significant threat to the public. One suggestion for this proposal is to pay for results by rewarding private and voluntary service providers who manage to keep an individual out of prison for longer than a given period of time, say two years.

It seems evident from the high rates of re-offending that many of the incentives of the current criminal justice system are failing. So, the Conservatives’ proposals to offer new incentives to the private and voluntary sectors to reduce re-offending are a timely step in the right direction.

Perhaps reform should go further though. For example, why not introduce similar incentives for the public sector as well, such as the National Probation Service and Her Majesty’s Prison Service? These public sector bodies could be paid for results by offering them a greater allocation of taxpayers’ money provided that re-offending rates are reduced.

Behavioural economists such as Professor Richard Thaler, who co-authored “Nudge: Improving Decisions About Health, Wealth and Happiness” and advises the Conservatives about regulation, understand that losing something makes us roughly twice as unhappy as gaining the same thing makes us happy. The government could use this powerful feature of human psychology to devise an even more effective incentive scheme whereby, in addition to rewards for reducing the rate of re-offending, a failure to reduce the rate of re-offending would lead to lost revenue for the private and voluntary sectors and reduced allocations of taxpayers’ money for the public sector.

Indeed, while discussing incentives, how about extending the incentive programme to the prisoners too? Incentivising prisoners to reduce the rate of re-offending ought to have the added benefit of making prisoners feel that they have more of a stake in the outcome of their – and their fellow prisoners’ – prison sentences.

Join the debate – post a comment below now to let folks know what you think about incentives in the justice system.


A proposal for a more cost-effective sanction than prison

Wednesday, February 3rd, 2010

There’s been much comment recently about the ineffectiveness of prison sentences – in particular short sentences of a year or less. The Howard League for Penal Reform reports that it costs about £40,000 per year to house the average prisoner in England and Wales but that nearly two thirds of prisoners re-offend within two years of release from prison. To put this figure into context, £40,000 is nearly twice the pre-tax salary that the average employee earned in the United Kingdom in 2008 according to the Office for National Statistics. As the Rt Hon John Redwood recently noted in his blog, a victim of a theft not only suffers loss of property but has this loss compounded by having to pay for the convicted thief to spend time in prison.

Although there’s a growing number of alternatives to prison sentences (such as community programmes), many people – including many sentencers – still think that non-custodial sentences are too much of a light touch.

If we want to reduce the waste of taxpayers’ money on ineffective prison sentences, we need to develop more alternatives which the public and sentencers will be happy with. With this in mind, another string to the sentencer’s bow could be the ability to deny a convict the right to receive state benefits in cash.

Any cash benefits to which the convict is entitled would be received for a given period of time by means of a card.

It would not be possible to withdraw cash from the card or go overdrawn and the card would be non-transferable (i.e. it could only be used by the convict). It would be illegal for retailers to allow people to pay for products like alcohol and cigarettes using such a card, in much the same way that it’s illegal for retailers to sell alcohol to children. In this way, users of the card would be encouraged to spend state benefits on the things for which they are intended.

The card would also make it much harder to spend state benefits on illegal drugs because few street drug dealers are set up to accept plastic. In this way, the card would help to reduce the current outrageous redistribution of wealth from hard-working taxpayers to illegal drug dealers via the benefits system depicted in television programmes like The Wire.

Given that life in prison is often perceived to be more comfortable for prisoners than life on the outside, loss of liberty may not be seen as adequate recompense for many crimes. Accordingly, the ability to deny a convict the right to receive state benefits in cash for a period of time could be a further useful sanction for sentencers.

Those of a more liberal persuasion may say that it’s bad for someone’s self-esteem to have to use a card which identifies them as a convict. But is this any worse than the stigma attached to a prison sentence or a community sentence?

On the contrary, the card might help to improve self-esteem by discouraging spending on addictive substances like alcohol, cigarettes and illegal drugs. Indeed, the card could be a helpful reinforcement to addiction treatment programmes. Again, compare this to prison where illegal drugs are often readily available.

In small ways, the card could also help to improve financial literacy. For example, managing the account and calculating how much money remains available on the card. Improved financial literacy could also help to build self-esteem.

One day we might consider extending this use of card technology to the whole cash benefits system. In the same way that chip and pin cards helped to reduce the level of credit card crime, this card system could help to reduce benefit fraud, for example by a combination of chip and pin technology and having a photograph of the holder on the card.

If you think any of this sounds like a good idea, please let me know by posting a comment. Any improvements on the idea will also be gratefully received. If there’s enough of a positive response, I’ll be encouraged to write to the Ministry of Justice about the idea.