Paying Robbers not to Rob
Alex Tabarrok is skeptical that this plan, quoted by him from somewhere else, will work:
…the Yobe State Government [in Nigeria, AT] determined to curb the spate of armed robbery in the state introduced a novel anti-crime, social protection programme, what it termed “the repentant robbers scheme”. The objective was to encourage armed robbers in the state to confess to their sins, and if they did and signed up for the programme, the state offered to pay them a sum of N5, 200 per month. The repentant robbers were only required to swear with the Holy Qu’ran that they would never again return to their bad ways.
The big problem is that now there is an incentive to become an armed robber, in order to retire and get the pension. There might be something to this, though. What we’d like to do is to identify the potential criminals and give them an efficiency wage,
as in the paper of mine abstracted below. Then a reduced marginal utility of income plus the threat of losing the pension would deter future crime.
Another possible advantage (though still with the time consistency problem) is that having confessed to the old crimes, the criminals would be vulnerable to a recidivism penalty if they stole again, and might be deterred.
`An Income-Satiation Model of Efficiency Wages,” Economic Inquiry (July 1992) 30(3): 467- 478. Efficiency wages are wages that exceed a worker’s reservation wage. A standard explanation for such wages is “bonding”: by increasing the worker’s fear of discharge, high wages increase the worker’s cost from punishment. A neglected alternative is “satiation”: by decreasing the worker’s marginal utility of income, the high wage decreases the benefit from misbehavior. Satiation, unlike bonding, applies even in a one- period model, but it relies on the misbehavior having a monetary benefit and on at least part of the punishment being nonmonetary. (http://rasmusen.org/published/Rasmusen_92ECINQ.effwages.pdf) .