Organizational structure, police activity and crime

• We evaluate the impact of an organizational reform in jails.
• We find it increased police activity and reduced crime.
• The results are consistent with optimizing behavior by police.
• Organizational structure matters in the fight against crime.

How does the organizational structure of law enforcement agencies affect police activity and crime? We examine the consequences of an organizational reform in Israel that transferred the responsibility for housing arrestees from the police to the prison authority. Using the staggered rollout of the reform in different regions of the country, we document strong evidence that this organizational change led to an increase of 11% in the number of arrests and to a decrease of 4% in the number of reported crimes, with these effects concentrated in more minor crimes. The reform also led to a decrease in the quality of arrests, measured by the likelihood of being charged following an arrest. These findings are consistent with the idea that the reform externalized the cost of housing arrestees from the police's perspective, and therefore led the police to increase its activity against crime.