Short-Term Pressures, Long-Term Consequences: Assessing the Associations Between State Budget Priorities and Crime Across Multiple Time Horizons

This study examines the reciprocal relationship between crime and spending across 49 U.S. states from 1970 to 2022. We estimate two-way fixed-effects models to identify how crime and structural conditions correlate with budget allocations across five areas – policing, corrections, elementary and secondary education, higher education, and health and hospitals – and distributed lag models to assess how allocations relate to crime over the subsequent decade. Violent crime is positively related to spending on law enforcement, whereas other social spending categories appear largely unrelated to violence. Elementary spending is negatively associated with violent crime two and 10 years later, while positively associated four years out. Moreover, while elementary education and healthcare investments have negative cumulative relationships with violent crime, higher education spending is positively and cumulatively associated with violence. The findings suggest that while reactive increases in policing may have limited long-term effects, sustained investments in preventive social investments show potential for reducing crime.