| Abstract: | The paper's main objective is to show that a market pricing system will, up to a certain output level, permit an economically efficient solution to the problem of allocating contractor's police services among the metropolitan political areas. But once additional police inputs succeed in establishing relatively low levels of criminal activity, the market mechanism will have a tendency to break down. A market dysfunction takes place because further increases of police services will not be able to elicit the expected decreases in crime. Failure of the market pricing system gives rise to an ancillary conclusion that other inputs besides police are needed to wage a successful battle against the rising levels of criminality. |
