Mobile criminals, immobile crime: The efficiency of decentralized crime deterrence

In this paper we examine a class of local crimes that involve perfectly mobile criminals, and perfectly immobile criminal opportunities. We focus on local non-rival crime deterrence that is more efficient against criminals pursuing domestic crimes than criminals pursuing crimes elsewhere. In a standard case of sincerely delegated politicians and zero transfers to other districts, we show that centralized deterrence unambiguously dominates the decentralized deterrence. With strategic delegation and voluntary in-kind transfers, the tradeoff is exactly the opposite: Decentralization achieves the social optimum, whereas cooperative centralization overprovides for enforcement. This is robust to various cost-sharing modes. We also examine the effects of the growing interdependence of districts, stemming from criminals' increasing opportunities to strategically displace. Contrary to the supposition in Oates's decentralization theorem, increasing interdependence makes centralization less desirable.