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A More Economically Efficient Kind of Gun Control?

Gun Control and Liability Insurance

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Because of the Virginia Tech shootings I have spent a lot of time recently thinking about guns and gun control.

The issue of gun control is usually presented in terms of bans and restrictions. What type of guns should we ban? Who should be restricted from owning a gun?

The more I think about the problem (from the perspective of an economist) the more I believe our approach to the problem is misguided. As we have seen in the case of marijuana, outright bans tend to be both inefficient and ineffective. I believe our current approach to gun control is both, for a couple of reasons.

Political Considerations

As with any law being discussed, the issue of politics is always at the forefront. See Governments Misusing Pigovian Logic for a prime example. The gun control policies enacted which are enacted in a particular jurisdiction are going to be based on what is popular, not what is "good".

Bureaucracy Building

Gun control laws, and the bureaucracies that enforce them, have no real incentives to ensure that guns do not get into the "wrong" hands. No doubt they care (possibly deeply) about the health and welfare of others. But their first goal of bureaucrats is going to promote their own job and interests, which typically means building their empires as large as possible. See The Logic of Collective Action for more on the topic.

Is there a solution?

Here is one solution to the problem I thought of. I am quite certain that other economists have thought of this before, but I've never seen such a suggestion in any academic article. If you know of one, please contact me.

Instead of building huge government empires to control guns, why do we not just pass a law that requires that the owner of a firearm buy third party liability insurance in the amount of, say, five million dollars?

This plan has a number of nice features:
  1. It ensures that victims of shootings will have access to compensation (so long as the firearm owner complies with the law).

  2. Unlike government bureaucrats, insurance companies have a financial incentive to ensure that those they insure are "good risks". Let insurance companies and insurance markets determine who is a good risk and who is not. They will do a far better job of it than any government bureaucrat.

  3. Insurance companies are likely to come up with a lot of win-win solutions that save money and make all of us safer, such as "take training course X and we will reduce your premiums by $Y a month. They are more likely to come up with effective solutions, because they have the financial incentive to do so and the process has now become depoliticized.

There is still obviously a strong role for the government under this plan. They will have to enforce the law that firearms are properly ensured, such as they enforce similar laws for cars today. Anyone found not to be in compliance would be subject to severe fines and/or jail time.

I believe such an approach would work far better than any law on the book in Canada or the United States. But I'd love to hear your thoughts - you can contact me by using the feedback form.

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