Tuesday, August 28, 2012

Time to Serve

This idea, that people in China can pay a "double" to serve time for them in prison, is so odd that I have trouble believing it's true.

The problem is that it is SO inefficient.  If you allow this practice, then you should reduce all penalties to huge fines.  Then you could pay the state, or serve the time.

The advantage, from the perspective of the state, is that they would get the revenue.  It is bizarre to accept a double for jail time, and then pay the costs of incarcerating that double.  The only punishment paid by the perpetrator is the payment, in effect a fine.  Why dissipate that cash by running jails?  Take the cash directly, and make the fines huge.  $100 per day, something like that (apparently the "wage" to serve in jail is $31, so $100 is substantial).

But, all that aside, the question posed to me by the LMM (who sent the link):  Is the private transaction here euvoluntary?  That is, is the poor person / street person / hobo who serves the time as a double acting as a free agent?

I'm thinking the answer is "yes."  These are people with a very low opportunity cost of time, and their outside option is pretty bad.  But there should be a competitive "labor market" for doubles, and in prison you get fed.  A payment of $31 per day for a month is a smidge over $900, in a country where minimum wage is $150-$200 per month.

So:  dumb policy.  Encourages corruption, wastes resources.  But, exploitative of the "double"?  Nope.

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Do you have suggestions on where we could find more examples of this phenomenon?