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Archives of Business Review – Vol. 8, No.10

Publication Date: October 25, 2020

DOI: 10.14738/abr.810.9282.

Stenis, J. (2020). An Economic Instrument to Reduce the Crime Rate in Sweden. Archives of Business Research, 8(10). 121-130.

An Economic Instrument to Reduce the Crime Rate in Sweden

Jan Stenis

Kristianstad, Sweden

ABSTRACT

Objectives: Crime is one of the most important social problems,

affecting public safety, children’s development, and adult

socioeconomic status. The Naturally Optimised Revenue Demand in

Communities, NORDIC model was applied to reduce the crime rate.

Methods: The NORDIC model that formed the basis of my study, was

adapted to crime prevention. The approach was tested in a realistic

case study on the crime rates in Sweden. Results: Governments

obtained a tool to monitor, manage and evaluate the criminality. End

users including law enforcement authorities and politicians could also

use the tool to redesign the crime policy. The launched model produced

constructed shadow costs to induce economic incentives to reduce the

crime rate. The model considered the public’s awareness about crime.

Conclusions: This paper introduced a practical, economic instrument

for improved management of the crime rates. The NORDIC model could

be used to reduce the Swedish crime rates and its danger to health as

well as to raise the public’s awareness of crime issues.

Keywords: Crime prevention; Economic instrument; Incentives; Sweden.

INTRODUCTION

Crime is one of the most important social problems, affecting public safety, children’s development,

and adult’s socioeconomic status. Understanding factors that may cause higher crime rates is

critical to enable policy makers reduce crime rates and enhance citizens' quality of life [1].

Excessive crime is a global problem with enormous economic consequences. In Sweden, the

national costs of prison and probation services in 2018 was approximately USD950 million. In

2012, these services cost USD760 million [2]. In 2018, 16 per cent of the Swedes believed that law

and order was the most important problem. In 2014, the same figure was 4 per cent [3]. The explicit

purpose of adopting the legal changes in Sweden in 2001 was to improve the support accorded to

crime victims. However, actors in the law-making process indicate that their motives in this

process were symbolic and toughening the penal law and promoting victim impact statements was

not in line with social democratic ideology [4]. Therefore, the results of this paper will be important

in limiting the Swedish crime rate.

This paper addresses the nations’ criminality-burden. The objective of this study was to launch a

practical method of reducing the crime rate by designing a decision-support tool to be used by

authorities, politicians and other citizens interested in crime policy to facilitate the daily use of the

Naturally Optimized Revenue Demand in Communities, the NORDIC model [5-9]. This was done to

facilitate the use of the NORDIC model by authorities and crime managers. My hypothesis was that

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URL: http://dx.doi.org/10.14738/abr.810.9282 122

Stenis, J. (2020). An Economic Instrument to Reduce the Crime Rate in Sweden. Archives of Business Research, 8(10). 121-130.

by applying the NORDIC model, the crime prevention could be enhanced. Moreover, my research

question was whether it was possible to reduce the crime rate by employing economic instruments.

My research focused on accomplishing feats that would result in drastic changes. A case study using

an analytical approach of stakeholders was conducted. The research design had a logical approach

inherent in the mathematics of the NORDIC model that has historical data. However, a quantitative

research methodology dominated the research process and increased the scientific rigor of the

study to support decision making. My tool expanded knowledge on crime prevention and increased

the public’s awareness.

The background and motivation for the study has already been given. Subsequently, the theory for

the NORDIC model will be outlined with a description on how it is used. The case study will show

how the crime rate in the nation of Sweden can be reduced by applying the model. Subsequently,

the paper will present the results and discussion, conclusion, benefits of the proposed model, and

recommendations for authorities and politicians follow.

The practical implications of this study are better circumstances for the inmates and affected

citizens. Leaders can also logically explain their reasons for initiating actions as opposed to basing

their decisions on emotional reasons. This study filled a research gap by providing new economic

instruments to manage criminality. The results of this study could potentially improve the

economy and the living conditions, due to limits in criminality.

LITERATURE REVIEW

A review of state-of-the-art works by other academics on crime, crime rate, crime prevention,

criminality, relapse prevention, economic instruments, shadow costs, and models was conducted.

The review showed that Hajela et al. [10], using historic crime events as indicators to predict crime,

found that a model with hotspot analysis achieves better performance. Hazra [11] who investigated

the determinants of crime in India found that only Gross State Domestic Product (GSDP) per capita

could explain the total crime rates.

Berg and Jeong-Yoo [12] showed that the equilibrium crime rate was stable whenever the broken

window policy targeted the lowest among multiple equilibrium crime rates. Taylor et al. [13]

examined the determinants of park crime by drawing together threads from community

criminology into one conceptual frame. H. Wang et al. [1] observed that performance in crime rate

inference significantly improved when employing the geographically weighted regression on top

of the negative binomial model (GWNBR) and this outperformed the negative binomial model. Y.

Wang et al. [14] collected Twitter data and presented preliminary evidence that social media data

could be used to help predict crimes. Zaman et al. [15] showed a positive relationship between the

presence of scientific and technical journals (STJ) articles and crime rates. The results of panel

causality confirmed the unidirectional causality running from crime rate to STJ and R&D

expenditures.

Ingilevich and Ivanov [16] compared different approaches to forecasting the number of crimes in

different areas of the city and determined that gradient boosting was the most appropriate method

for crime rate prediction. Quick et al. [17] applied a set of Bayesian multivariate spatial models to

analyze burglary, robbery, vehicle crime, and violent crime at the small-area scale. They found that