In the bad economy, we see local governments and police forces trying to gain revenue by writing more traffic tickets for fines. We also see red light and speeding cameras being installed for revenue-generating purposes ("It'll pay for itself and more!").
How can we prevent this perverse behavior? (Even worse, there is incentive to encourage crime, for example, removing speed limit signs.)
The revenues from the fines ought not directly benefit the enforcing agency. (But the cost of enforcing is borne by the enforcing agency.) The fines get passed one level up in government. Some of it, diluted over the entire upper jurisdiction, gets passed back down. This dilution prevents the perverse incentive, vaguely Tragedy of the Commons in reverse. (Should still have the good hearted incentive the prevent crime.)
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