Original Source Date: May 1, 2001
Impact Highlights
| Annual ROI | Time Horizon | Confidence |
|---|---|---|
| 133.0% | 8.4 years | 1 - Very Strong |
| Activities | Outcomes | Indicators |
|---|---|---|
| Crime / Legal, Justice | Safety / Support | Violent crime |
| Geography | Demographics |
|---|---|
| United States, Washington | Children, Men, Women, Working Age |
Article Details
This report describes the “bottom-line” economics of various programs that try to reduce criminal behavior. We identify the types of programs that can, as well as those that apparently cannot, reduce criminal offending in a cost-beneficial way. This research was prepared for the Washington State legislature. The legislature directed the Washington State Institute for Public Policy (Institute) to evaluate the costs and benefits of certain juvenile and adult criminal justice policies, violence prevention programs, and other efforts to decrease particular “at-risk” behaviors of youth.
The analysis focuses on comparative economics. For a wide range of programs—from prevention programs designed for young children to correctional programs for juvenile and adult offenders—we examine whether a program’s benefits are likely to outweigh its costs. Significantly, these estimates are derived from a common methodological approach. This allows direct “apples-to-apples” comparisons of the economics of different types of programs designed for widely varying age groups.
The Institute’s cost-benefit analysis identifies programs that can make economically sound contributions to Washington’s criminal justice and prevention systems. The goal is to find programs that save more money than they cost. To make these determinations, the Institute quantitatively reviewed over 400 program evaluations conducted mostly in North America over the last quarter century. The Institute organized individual evaluations into policy-relevant topics, such as early childhood education programs, adult drug courts, cognitive-behavioral programs for juvenile sex offenders, and so on. Some program groupings are quite general and some are for very specific, “off-the shelf” programs such as those identified as part of the “Blueprint” project of the University of Colorado’s Center for the Study and Prevention of Violence. Based on our analysis of how well these programs work in lowering crime, the comparative economics were then estimated with the Institute’s cost-benefit model.
Five General Findings
1. Some Good Investment Options Exist. From a cost-benefit point of view, we identified some programs that can improve the effectiveness of Washington’s taxpayer-financed criminal justice system. That is, compared to Washington’s current system, these programs are good bets both to lower crime rates and to lower the net costs of crime to taxpayers and crime victims, thus achieving an enviable “win-win” status.
We found the largest and most consistent economic returns are for certain programs designed for juvenile offenders. Several of these interventions produce benefit-to-cost ratios that exceed twenty dollars of benefits for each dollar of taxpayer cost. That is, a dollar spent on these programs today can be expected to return to taxpayers and crime victims twenty or more dollars in the years ahead. Four of these programs are now being implemented by the juvenile courts in Washington State as a result of recent legislative and administrative actions.7 In addition to programs for juvenile offenders, we also found economically attractive prevention programs for young children and adolescents and, at the other end of the age spectrum, for adult offenders.
2. Some Bad Investment Options Exist. Not all of our economic findings, however, are positive. We found some programs that do not lower criminality and have negative economic bottom lines. Resources spent on these programs would be better directed toward programs that yield positive returns.
We also found programs that demonstrate some success in reducing the criminality of participants, but the cost of running the programs is greater than any savings realized. The economics of crime prevention or intervention require not only program effectiveness (crime reduction), but the services must also be delivered economically. In this regard, crime prevention and intervention is like any business: in order to have a positive economic bottom line, not only does a product need to work and be successful, it also needs to be produced in a cost-efficient manner. In our review of the available options, not all programs passed these two tests.
Thus, the main lesson from our cost-benefit analysis of the evaluation literature is that some prevention and intervention programs are cost-beneficial with certain groups of people in certain settings, and some are not. As with any public or private resource allocation decision, selecting and successfully implementing the right investments for the right populations is the real challenge for policy makers and program administrators.
3. A Program That Can Achieve Even Relatively Small Reductions in Crime Can Be Cost-Beneficial. We found that the best programs can be expected to deliver 20 to 30 percent reductions in recidivism or crime rates for the intended populations. More typical programs, on the other hand, were able to demonstrate only five to ten percent reductions. For example, we found that typical success rates for “good” adult offender programs lower the chance of re-offending by 10 percent. An example can help put this number in perspective. In Washington State, about 50 percent of all adult offenders leaving prison are subsequently re-convicted for another felony offense within eight years from release. A 10 percent reduction from a 50 percent starting point results in a 45 percent recidivism rate—a significant, but not a huge, reduction. The economic question, however, is whether a reduction of even this modest magnitude, given the cost of the program, produces a net gain for taxpayers and crime victims. The cost of crime to taxpayers (who pay for the criminal justice system) and crime victims (who suffer personal and property losses) is high. Based on our economic analysis of these crime-related costs, we found that programs that can deliver—at a reasonable program cost—even modest reductions in future criminality can have an attractive economic bottom line.
4. Programs Should Be Evaluated. If all programs worked, the need to evaluate individual programs would not be too critical. As an analogy, when the prices of all stocks in the stock market are going up, the most important thing is to be in the stock market, not to spend much time evaluating the prospects of one stock versus another. But since we found that not all programs work, formal evaluations are important to determine if outcomes are being achieved in a cost-beneficial manner. In Washington, as in the rest of the United States, most programs designed to reduce crime have not been rigorously evaluated. Some programs may be working and could be expanded. Others may not be achieving their goals, yet continue to absorb scarce tax dollars that could be directed toward more effective programs, or returned to taxpayers. While evaluations are not cost-free, making decisions without objective information on effectiveness can result in inefficient resource allocation. Evaluating the costs and benefits of programs and policies should be a key part of an overall strategy.
5. A Portfolio Approach is Recommended. While the research base for “what works” has improved in recent years, it remains limited and, as a result, a degree of uncertainty must be applied to the economic estimates presented in this report. Therefore, we believe it would be a mistake to allocate all prevention and intervention dollars into any one program no matter how attractive the numbers might look; unfortunately, sometimes bad things happen to good programs. Similar to the situation facing any investor, public policy makers should avoid putting all of the prevention and intervention eggs into one basket. Therefore, we recommend that a “portfolio approach” be developed achieving a reasonable balance between near-term and long-term resources, and between research-proven strategies and those that are promising but in need of research and development. In particular, a portfolio approach should be adopted to reduce the overall risk that some programs, like some stocks in the stock market, may not turn out to be good investments when they are actually purchased and implemented.
[Note: The statistics above represent an average across 34 different programs for adults and juveniles. For program specifics, please refer to the study linked below.]
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