Entrepreneurial Police and Drug Enforcement Policy

The hypothesis that drug enforcementis relatively high in local jurisdictions where statelaws dictate that police retain seized assets istested in the context of a reduced-form equation ofthe supply and demand for drug enforcement. Theresults are robust across model specifications, someof which directly control for the level of drug use:legislation permitting police to keep seized assetsraises drug arrests as a portion of total arrests byabout 20 percent and drug arrest rates by about 18percent. Police bureaucrats apparently desirediscretionary budget increases, and they haveconsiderable discretion in determining resourceallocation.