The Economic Case for Citizen Oversight of the Board of Police Commissioners

This article first appeared in the St. Louis Beacon.

Many believe that Missouri, and Saint Louis in particular, has been slow to catch up to modern times. The Board of Police Commissioners for the Saint Louis Metropolitan Police Department reflects that conviction all too well.

The recent flap over the questionable actions of the police commissioner seems, to an outsider, like a tempest in a teapot. He probably should not have made that now-infamous call, but he did. As a result, he has given up his claim to the title of colonel. The incident should raise concern, however, over how the board is chosen and to whom it answers.

The police board of Saint Louis was established in 1861. Conflicting sentiments of the state and city governments over the slavery issue led to the creation of a state agency — the board of commissioners — to oversee the Saint Louis (and Kansas City) police force. Because Saint Louis had a huge arsenal and was an important hub for transportation and a potentially important military location, the pro-Southern state government wanted to ensure control over the police force in a more pro-union city.

Such statutes were not uncommon across the country — similar laws were passed in New York and Maryland, for example. But only Missouri retained this model of oversight for cities the size of Saint Louis. Why?

Members of the board are appointed by the governor to serve four-year terms. Supporters of the status quo argue that this selection process creates checks and balances. Because they are not beholden to the local political machine, the board is, in theory, better able to make decisions for the benefit of Saint Louis residents.

Economists think about such organizational structures. In the realm of corporate governance, the “principal-agent” problem has been used to explain why some corporate boards are able to engage in questionable, sometimes illegal, activity. In a corporation, management is the agent for the principal — in this case the owners of the firm, usually its stockholders. The large modern corporation often is run by a management team whose decisions are largely immune from shareholder interference. Unless they can effectively concentrate their power, shareholders exert little control.

The events of the past decade have showcased the problems that arise when there is separation of ownership and control. Executive decisions made at Enron, Tyco, and more recently Lehman Brothers and General Motors highlight the potential damage wrought by such lack of oversight.

Who is the principal when it comes to local police activity? The citizens of Saint Louis. And the agent? The agent is the board, but they are separated from the citizens because they answer only to the governor. In other words, unless city residents can collectively sway the governor, the police board can operate in a manner that is immune to their wishes and concerns.

Do I think that the board is deaf to local concerns? No. But the current structure gives rise to potential problems, problems that have arisen in corporations when ownership and control are separated.

Some argue that putting the police board under the control of city hall will increase its politicization, make it part of the local political machine.

Two observations: First, its current organization does not shelter it from political pressure; it merely lengthens the physical distance between the principals and the agent. Second, making the police board answerable to local elected officials reduces the separation of ownership and control. When something goes wrong, there is a local individual, ultimately the mayor, who must bear the brunt of blame. The mayor faces a referendum on his management in every election, so the public’s voice is heard.

Let Saint Louis enter the 20th century: Return control of the police board to the citizens of the city.

Rik W. Hafer is distinguished research professor and chair of the Department of Economics and Finance at Southern Illinois University Edwardsville and a scholar at the Show-Me Institute.