FISCAL STRESS AND THE PRODUCTION OF PUBLIC SAFETY - A DISTANCE FUNCTION-APPROACH

Abstract Faced with increasing crime rates, but nonincreasing budgets, local governments are seeking cost saving means of providing public safety. This paper investigates a bureaucracy's response to fiscal stress as well as its ability to efficiently substitute civilian for uniformed personnel. Exploiting duality theory, a distance function is used to model technology, retrieve information concerning substitutability and shadow prices of personnel, and test for cost minimization. Morishima elasticities are adopted to allow for asymmetry in substitution between types of personnel. It is found that the more adverse the public safety environment and budgetary condition, the more efficiently resources are allocated.

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