PLAN RESTORE BELIZE NOT A NATIONAL SOLUTION – PART II

In last week’s edition of this column this writer assessed Government’s response to crime by way of its recent proposal Restore Belize and the accompanying cabinet changes.  It was noted that the labyrinth institutional structure that was proposed is an augmentation and duplication of some aspects of the existing Crime Control Council that is enshrined in the legislation.    This writer further opined that to meaningfully address the potential benefits of those changes it is imperative that there is some appreciation for examining the economic and social cost of crime in Belize.  It is by assessing what is the cost implication of crime that policy decisions can be made that provide for the optimal utilization of limited resources.  Therefore, this week this columnist will examine the multifaceted impact of crime and how to assess the cost incurred in the anticipation of crime, as a consequence of crime and the cost associated in responding to crime.

In examining the cost of crime it must be addressed from several perspectives.  Firstly there is the cost associated with the anticipation of crime, such as preventative methods that are employed to protect oneself and property, for example increased security services.  Secondly, there is the cost assessed as a consequence of crime, this cost can be assessed as the cash outlay for lost of property or cost of prison place, but there is also the intangible cost due to psychological trauma and injury.   Lastly, cost is assessed for responding to crime.  This is the cost for the government to provide police services and the cost for utilizing the judiciary system to prosecute criminals.  The aforementioned measurement techniques must be underpinned by a clear understanding of how cost is determined and who bears the cost of crime.  Therefore, a scientific methodology must be so established that it encompasses the full and true cost in any assessment that is undertaken.  Some key principles must be examined.

In any discussion on the cost of crime, ones immediate interpretation is the consideration of the economic cost of crime.  Economic cost is usually understood to mean financial cost – any cost that can be easily quantified and expressed in dollars and cents; for example the value of a stolen car or the cost per day for keeping a prisoner at Kolbe Foundation.  However, economic cost is sometimes distinguished differently from social cost or the cost to society that is not easily quantifiable in cash terms.  Crimes such as violence against a person or lost of life have far more intangible cost that is sometimes difficult to reduce to cash terms.  Thus, to provide a comprehensive view of the full and true cost of crime, both the economic and social cost of crime ought to be assessed, however this would mean having to place a cash value on physical and emotional suffering which may prove difficult.

A second key principle that must be borne in mind when assessing the cost of crime is the concept of opportunity cost.  This economic concept is one that places a value on a resource in its alternative use.  Utilizing this principle one is able to value the human, physical and financial resources that would be made available for some alternative use other than crime prevention, detection or prosecution.  In economics the best measure of opportunity cost of a resource is its market value or price.  For example the opportunity cost for purchasing burglar bars for one’s home if $300 is equal to $300 that cannot be made available for food or educational expenses.  Opportunity cost is not always easily measured as there are some resources that have no market value.  For example the emotional suffering a person endures for having to stay indoors at night in Belize City for fear of crime, does not carry a market value, but represents an opportunity cost to the extent that the person would value going out and spending time with family and friends.  In the case of government resources, opportunity cost are far easier to determine; for example spending $1M for the operation of a project coordination unit versus investing that $1M in building new classrooms.  The opportunity cost can be easily quantified.

Another key principle that must be considered when assessing cost of crime is transfer payments.  A transfer payment is the legal transfer of resources from one party to another.  Examples of transfer payments are social security payments, social assistance or gambling.  Transfer payments are not regarded as a loss to society but as a cost to society.  In the case of a property crime, property is transferred from the owner/victim to the offender; this is considered an unwanted transfer and therefore must be considered as a cost of crime.  Transfer payments also occur with insurance claims.  Potential victims take out insurance policy for their lives and property and pay a premium.  Victims of crime who have insurance would receive monies from the insurance company after any losses they would have had as a result of crime.  Therefore, there is a transfer of resources from the potential victims who pay insurance premiums to the actual victims who receive compensation.  Another form of transfer payment would be any compensation paid to victims of crime or their families when there is the loss of life or property due to the negligence of the government.  Such form of transfer payment does not occur in Belize, but in other countries like the US and UK if the police are found responsible for the death of an individual there is some financial compensation that would be paid.  In Belize no such responsibility is taken on board for Belizeans who lose their lives while in police custody or at the hands of the police directly.  Thus, transfer payments are cost that must be accounted for and where they are not being made in the case of the government such consideration must be provided.

Beyond having a clear understanding of the underlying principles that underpins any assessment of the cost of crime, cost can be disaggregated by those who bear the cost of crime.  Firstly, there are victims be them individuals, households, businesses, organizations or institutions who face economic costs as a consequence of crime and opportunity cost of time spent dealing with crime.  Secondly, potential victims also bear cost in anticipation of crime by taking measures to reduce risk of victimization, such as security services, alarm systems, insurance premiums and the cost of government crime prevention activities.  Lastly, society also bears the cost of crime through resources spent to bring offenders and criminals to justice through the use of the justice system which involves the police department, director of public prosecution, magistrates and judges, courts, legal aid, prison and probate services.  These are all costs that tax payers bear as they are expenses undertaken by government to provide those services.

By having an appreciation of how the cost of crime can be assessed, the benefits of such an assessment can then be utilized as the basis for developing any crime reduction program.  Through the use of cost benefit analysis adequate and meaningful crime prevention program could be assessed and evaluated.  In the case of the Restore Belize Plan, it is evident that the full cost and benefit of such an effort has not been clearly conceived.  The government has presented an estimate of some $30M to implement this program, however the benefits of such a huge expenditure remain uncertain as well as the source of funding for this effort.  Therefore, when financial resources are limited and difficult to come by, the onus on government is even more so to conduct the level of technical analysis to ensure that the Belizean society will get value for money spent.  If the capacity is not resident with government, engaging the academic community would prove beneficial in driving policy development in Belize.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

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