The John M. Olin Center

Paper Abstract

1008. J. Mark Ramseyer, On Privatizing Police:With Examples from Japan, 05/2021; forthcoming in The Cambridge Handbook on Privatization, Avihay Dorfman & Alon Harel, eds.

Abstract: Security is often a non-excludable public good that involves economies of scale. For these obvious reasons, modern democracies provide their residents with basic security services out of the public fisc.

Yet the capacity to protect overlaps with the capacity to prey. As a result, regimes in dysfunctional societies sometimes use the public security apparatus to extract benefits. Sometimes the security services use their resources to extract benefits for themselves.

Public security is also a normal good: the level of security that people demand tends to increase with income. Where communities fund their security locally, richer communities can buy themselves higher-than-average security through their municipal government. They can also buy extra security on the private market, of course, but the need becomes particularly acute where the central government funds security. Where higher levels of government fund the security, citizens cannot select the level of security services in the course of deciding where to buy a home. Instead, those who want high levels of security services will need to buy them from private firms directly.

In democracies, citizens buy private security services to supplement the security provided through the public police. In dysfunctional societies they sometimes do this to protect themselves from the public police.

In this essay, I illustrate several of these simple principles with examples from Japan: the creation of the modern police force, the chaos after the 1923 earthquake, and the development of modern private security firms.

1008 PDF_revision.