Wednesday, July 18, 2007

An Unexpected Externality of Rationing Fuel

Any economist knows how delicate any discussion on externalities could become. Surprisingly there are always externalities that one does not notice at the moment of making a decision or implementing a policy. As time goes by one learns more about these externalities.

Couple of days ago Hamshahri daily, a conservative paper run by the municipality of Tehran, printed a story about an antique smuggling band. Iran Cultural Heritage Organization (ICHO) has pressed charges against its members and Crime Investigation Department detectives arrested a few suspects, who confessed and told the detectives that they would lead them to the location of the ring leader.

According to Hamshahri’s report Tehran Police Department wrote an official letter to ICHO stating that its officers were ready to make the arrests, if ICHO would provide them with gas for patrol cars. According to Hamshahri report the letter explicitly stated that the police could not carry out these arrests since it does not have the necessary fuel to make the trip to Northern provinces, where the ringleader was reported to be in hiding. Since ICHO is the suing party, if it wants the mission to continue it should provide the fuel.

ICHO has responded that it would gladly provide police with cars and hotel accommodation, but it could not provide them with gas, since it does not have enough rationing cards! Inspector Jarrahi told Hamshahri correspondent that taking the suspects with bus was ruled out because of the security concerns.

One wonders how many would have thought that rationing gas would have affected fighting crimes.

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