The cost disease blues – do the police suffer from Baumol's cost disease?

Who is the researcher behind this article?

My name is Matti Vuorensyrjä Tutkija and I have worked approximately 13 years at the Police University College of Finland as a senior planning officer and a researcher. Before that I worked approximately 12 years as a researcher and as a project manager in the University of Tampere and University of Jyväskylä. So I have about 25 yrs. of professional research experience.

As to my educational background, the list is long, but I haven’t done my PhD as yet: I have MA in political science, combined primarily with economics, mathematics and statistics. I also have licentiate degree in political science (Lic. soc. sci.), in which (the licentiate thesis) I concentrated on the concepts and methods of evaluation of public production. Just don’t worry about this: the Lic. degree, I guess, is a Finnish curiosity, something between MA and PhD, and even in Finland no one does one anymore. I was probably the last person in the universe doing Lic. soc. sci. degree. I also have MA in history, primarily combined with philosophy and Latin. An then, I have a teacher’s diploma. At the moment I am working for my thesis (PhD) in management studies. The focus is on the effects of technological change on work and labor in slow-progressive sectors of the economy, such as live performing arts, health care, education, and law enforcement.

What is your latest publication about?

My latest article is about the rate of growth of division-specific unit costs per output in the Finnish police force, and more specifically the divisions of surveillance and emergency operations, criminal investigation, permits and licenses. Is the rate of growth of unit costs per output higher than the rate of growth of inflation, which means is the rate of depreciation of money, as assessed by the value of money converter, and inversely by consumer price index? You understand what it means if this is actually the case. It means that the real division-specific unit costs per output of the police are secularly on the rise. The police then suffers from the so-called “Baumol’s cost disease.”

So, taking a look at the developments in the Finnish police force, with data that derive from 2002-2015, I found that this, indeed, appears to be the case in surveillance and emergency operations division, and in criminal investigation division, but not in permits and licenses division. The implications in the long run are profound, if the proposition holds true. Just read the abstract of the paper, preferably the entire paper. 

Why did you write this article?

Live performing arts, health care, and education are known to suffer from Baumol’s cost disease. There is plenty of empirical evidence on the matter. There’s very little research on the themata, however, as regards the case of the police. The only paper I know of is van Reenen from 1999 (quoted in my paper). His conclusions were tentatively affirmative. The policy implications of secularly (i.e. constantly, permanently) growing real costs of law enforcement, and of public production in general, are profound. See the last few paragraphs of the latest article.

What would you say is the most important findings in your article? 

The idea of the paper is simple and the analysis is methodologically straightforward. I did a lot, and I mean a lot, of work, in collecting the empirical data for this paper, and sorting out all the data that I had to make it comparable in time (i.e. as time series’). I still do have many doubts about the data, all the proxies I had to use, and so on, but it is all place now, to be further studied. And yes, on the basis of my findings, the police do suffer from Baumol’s cost disease, and everything that comes with it.

This paper is closely related to Mattis earlier work:

Vuorensyrjä, M. 2018. Police Management Reform, Labor Productivity, and Citizens' Evaluation of Police Services. Policing: An International Journal of Police Strategies & Management, Vol. 41, Iss. 6, pp. 749–765.

Vuorensyrjä, M. 2014. Labor Productivity and Productivity Pressure in the Finnish Police Force. European Journal of Policing Studies, Vol. 2, Iss. 2, pp. 193-223.

Vuorensyrjä, M. 2014. Organizational Reform in a Hierarchical Frontline Organization. Policing: An International Journal of Police Strategies & Management, Vol. 37, Iss. 4, pp. 858-874.

Vuorensyrjä, M. 2013. Work and Labor in Slow-Progressive Sectors of the Economy. Nordic Journal of Working Life Studies, Vol. 3, Iss. 1, pp. 95-121.

Read more about Matti Vuorensyrjä's research here.