the evidence suggests that giving citizens the ability to “vote with their feet” will not discipline the leaders of a community. More fundamentally, the evidence shows that while the opportunity to vote is one difference between public and private systems of city governance, it is not the most significant one. In private systems, it is the lack of a separation of powers between an executive and an independent judiciary that is the more troubling weakness.
Deterring crime is one of the essential challenges for any large city. All of the evidence suggests that deterrence on this scale requires people to investigate crimes, and people to punish those who commit them. When private organizations carry out these functions, the decisions about which offenses to prosecute, and — crucially — how to determine whether a person is guilty of an offense, are made by the same people who exert executive authority. The actions of these private organizations give us a useful — and troubling — window into what can happen in the absence of an independent judiciary.
The examples he gives of poorly-behaved institutions with both police and judicial powers are Penn State and the Catholic Church. As he points out, the opportunity for customers to exit does not provide a sufficient incentive for the police-judicial systems to function properly. Does that mean, as Romer suggests, that policing and judicial powers must be separate in order to work well?
In his examples, the policing and judicial functions are bundled with other services, and those other services are what drive the choices of most consumers. I think that the same holds true for cities. A city provides a bundle of services, many of which come from the private sector–jobs, entertainment, etc. If you want fair, efficient law enforcement, the built-in incentives can be pretty weak.
If these functions were privatized, would it in fact work out badly if policing and dispute resolution were provided by the same agency? Perhaps, but I do not think Romer’s examples settle the issue.
For example, in a hotel, suppose that one of the guests is accused by another guest of creating a disturbance. Does the hotel have to use separation of powers in order to take care of the issue? I think not.
[note: I drafted this post a while ago, but as far as I know I have not run it. If I have, apologies for the duplication.]
Don’t most anarcho-capitalist ideas on justice actually have a separation of powers anyways? Rothbard, David Friedman, Bob Murphy, and now Micheal Huemer have all written books which argue that in an anarcho-capitalist system protection agencies will be distinct from arbitration agencies. This especially seems plausible given that most arbitration agencies that currently exist don’t also use their own private security forces.
For those of us who follow police and prosecutor misconduct/corruption I find it laughable that he thinks they behave better than a private institution would or that there is any real separation of power between them. They each feed off each other and it’s essential (in their own minds) that they given each other the professional courtesy of never questioning each others actions. A jury or judge also is not a defensible position as the vast majority of cases are solved by the arresting/prosecuting authority via a plea bargain.
There is often no such thing as effective police or prosecutor oversight, the political will simply isn’t there.
Chris H’s comment is consistent with how the system is designed to work in all of the models we’ve considered in our free city designs:
“This especially seems plausible given that most arbitration agencies that currently exist don’t also use their own private security forces.”
International arbitration is a well-established private system that already decides multi-billion dollar cases while maintaining a reputation for fairness such that arbitration is usually preferred to government courts. While the local city-scale development would provide security for the project, a natural safeguard is to submit all disputes (including disputes between a resident and the security force) to international arbitration agencies. This is likely to provide superior separation of powers than do current arrangements within government municipalities.
As Peter notes with respect to municipal “public” governments, “They each feed off each other and it’s essential (in their own minds) that they given each other the professional courtesy of never questioning each others actions.” There are many thousands of cases of police abuse in the U.S. each year which would probably not take place if accused individuals had the option of adjudicating their cases with private arbitrators (via internet if need be) in the international system rather than necessarily relying on local courts. They know they local courts support the police and as a consequence the accused individual is more likely to accept a plea bargain even if he or she is innocent and the police are guilty.