Amer­ica’s in­car­cer­ated econ­omy

Financial Mirror (Cyprus) - - FRONT PAGE -

The United States has 5% of the world’s pop­u­la­tion and 25% of the world’s prison pop­u­la­tion – about 2.2 mil­lion peo­ple, five times as many as in 1980. One out of ev­ery 100 Amer­i­can adults is in­car­cer­ated – the high­est per capita rate in the world, 5-10 times higher than in Western Europe or other democ­ra­cies. The so­cial and eco­nomic toll is sim­i­larly high.

The boom in Amer­ica’s prison pop­u­la­tion in re­cent decades is the re­sult of ramped up puni­tive crime-preven­tion mea­sures, in­clud­ing tougher drug penal­ties and manda­tory min­i­mum sen­tences, backed up by grow­ing num­bers of po­lice and other law-en­force­ment of­fi­cials. Be­yond the fi­nan­cial costs of larger po­lice forces and in­creased pres­sure on the ju­di­cial sys­tem is $60 bil­lion a year in spend­ing on state and fed­eral pris­ons, up from $12 bil­lion 20 years ago. And then there are the huge costs for those im­pris­oned (many for non-vi­o­lent crimes) and for their fam­i­lies and com­mu­ni­ties – costs that fall dis­pro­por­tion­ately on the poor, the un­e­d­u­cated, African-Amer­i­cans and Lati­nos, and the men­tally ill.

Per­haps the worst part is that the ex­pected ben­e­fits of Amer­ica’s “get tough” ap­proach have failed to ma­te­ri­alise. In­deed, there is only a mod­est cor­re­la­tion be­tween higher in­car­cer­a­tion rates and lower crime rates.

More­over, the re­cidi­vism rate is shock­ingly high: ac­cord­ing to a re­cent US Depart­ment of Jus­tice re­port, more than one-third of re­leased pris­on­ers were re­ar­rested within six months, and more than two-thirds were re­ar­rested within three years. In or­der to re­duce the size of the prison pop­u­la­tion, the re­cidi­vism rate must drop.

Of course, this is a com­plex prob­lem. Re­leased in­mates face huge bar­ri­ers to em­ploy­ment, hous­ing, health care, and ed­u­ca­tion. At least half face the added chal­lenge of men­tal health and ad­dic­tion is­sues. Yet very few have sup­port net­works to nav­i­gate re-en­try to so­ci­ety.

Clearly, a new ap­proach is needed – one that cap­i­talises on the com­par­a­tive ad­van­tages of the pri­vate sec­tor, state author­i­ties, and the fed­eral gov­ern­ment.

The fed­eral gov­ern­ment should rely on “pro­gres­sive fed­er­al­ism” to catal­yse and fund state-level pro­grams to com­bat re­cidi­vism. Many of these pro­grams can be based on pay-for-per­for­mance con­tracts, such as so­cial im­pact bonds, in which the fed­eral and state gov­ern­ments share risk with pri­vate-sec­tor ac­tors.

So­cial i mpact bonds, or SIBs, re­quire that pri­vate in­vestors and other non-gov­ern­ment ac­tors cover most or all of the up­front cost of a pi­lot pro­ject, to be re­im­bursed by the con­tract­ing gov­ern­ment agency only if in­de­pen­dent eval­u­a­tors con­clude that the pro­ject achieves its goals and saves taxpayers money. The world’s first SIB, launched in the United King­dom in 2010, fo­cused on re­duc­ing re­cidi­vism rates among 3,000 pris­on­ers at Her Majesty’s Prison Peterborough in Cam­bridgeshire, and showed promis­ing re­sults.

The first Amer­i­can SIB, aimed at re­duc­ing re­cidi­vism among ju­ve­nile in­mates at New York City’s Rik­ers Is­land Cor­rec­tional Fa­cil­ity, was not so ef­fec­tive. In­deed, last month, in­de­pen­dent eval­u­a­tors con­cluded that the pro­gramme had not met New York City’s tar­gets.

But, far from be­ing a fail­ure, the Rik­ers Is­land pro­ject val­i­dated the pay-for-per­for­mance ap­proach. New York City did not have to foot the bill for the failed ef­fort, but of­fi­cials gained valu­able knowl­edge about what does and does not work. Based on this ex­pe­ri­ence, another US firm is de­vel­op­ing a SIB for a dif­fer­ent re­cidi­vism pro­ject run by New York State.

In fact, many state-level pi­lot projects – some based on pay-for-suc­cess deals – to re­duce re­cidi­vism are un­der­way across the coun­try. New York State and Mas­sachusetts have launched statewide pay-for-suc­cess ex­per­i­ments. Min­nesota and Texas have run pi­lot projects with promis­ing re­sults. Ge­or­gia, us­ing a $6 mil­lion grant from the Depart­ment of Jus­tice, is fi­nanc­ing 15 sep­a­rate pi­lot pro­grammes that range from job-train­ing and hous­ing-sup­port ser­vices for re­leased pris­on­ers to faith-based “in­reach” pro­grams for those still in prison.

These state projects col­lec­tively amount to a form of crowd­sourc­ing – an ef­fec­tive method of test­ing a wide va­ri­ety of in­no­va­tive ideas, which can then be scaled up if they prove suc­cess­ful. In this sense, state and lo­cal gov­ern­ments are serv­ing as “lab­o­ra­to­ries of democ­racy.”

This is where pro­gres­sive fed­er­al­ism comes in. The fed­eral gov­ern­ment can work to sharpen and re­in­force state ef­forts by pro­vid­ing fund­ing and en­cour­ag­ing best prac­tices, while avoid­ing im­pos­ing any ide­ol­ogy on the projects. The fed­er­ally as­sisted pi­lot projects to com­bat re­cidi­vism in Ge­or­gia, for ex­am­ple, re­flect both “lib­eral” and “con­ser­va­tive” strate­gies, sup­ported by Democrats and Repub­li­cans, re­spec­tively.

Democrats want an ac­tive gov­ern­ment that solves tough so­cial prob­lems, whereas Repub­li­cans want pri­vate­sec­tor in­vest­ment and in­no­va­tion to do the job. But both par­ties like the idea of test­ing ri­val strate­gies in the real world, as ev­i­denced by bi­par­ti­san sup­port in Congress for a new fed­eral fund to sup­port pay-for-per­for­mance projects on a wide range of so­cial prob­lems, in­clud­ing health care, child care, and job train­ing. The com­bi­na­tion of pay-for­per­for­mance con­tracts and pro­gres­sive fed­er­al­ism seems to meet both sides’ re­quire­ments.

The Vi­o­lent Crime Con­trol and Law En­force­ment Act of 1994 – which pro­vided fund­ing for states to put more po­lice on the beat, im­pose tougher prison sen­tences, and build more pris­ons – was an ex­am­ple of how the fed­eral gov­ern­ment can en­cour­age ac­tion by state and lo­cal author­i­ties. A new fed­eral crime bill, in­cor­po­rat­ing pay-for­suc­cess con­tracts, could en­cour­age states to take a smarter ap­proach to crime, re­duc­ing manda­tory prison sen­tences and in­vest­ing in ef­fec­tive anti-re­cidi­vism pro­grams. Such an ap­proach would re­duce in­car­cer­a­tion and re­cidi­vism rates – and dras­ti­cally cut the oner­ous so­cial, eco­nomic, and moral costs of im­pris­on­ment.

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