Gun buybacks and incentives

I was interested to read this article in the New Zealand Herald earlier in the week:

Some New Zealand gun owners are upset they're being compelled to hand over their assault weapons for money. Others believe a government-imposed ban on certain semi-automatics following a March shooting massacre is the best way to combat gun violence.

And The Associated Press has found at least one man may have tried to swindle hundreds of thousands of dollars from the system set up to compensate gun owners...

[Police Deputy Commissioner Mike] Clement said the man showed up at an Auckland buyback event with thousands of magazines seeking to collect hundreds of thousands of dollars in government compensation. A possible flaw in his plan? Clement himself happened to be at the event.

"It's one of those things that didn't look right, didn't feel right," Clement said.

He said police were keeping hold of the magazines and hadn't paid the man any money while they carried out their investigation.

Policy changes create incentives to change behaviour, by changing the costs and/or benefits associated with the behaviour. However, changing the costs and/or benefits can also have unintended consequences (which is something I have blogged about many times before).

In this case, the gun buyback scheme created an incentive to buy cheap gun parts overseas, import them into New Zealand, and then give them to the government as part of the buyback scheme. Any difference between what the gun parts were purchased for overseas (plus the importing costs) and the amount received from the buyback ("between 25 per cent and 95 per cent of the pre-tax price") would be pure profit to the enterprising gun part importer.

The man referred to in the article was doing something that should have been easily anticipated by the government. It's not clear whether his actions were illegal, but they certainly were not within the spirit or the intention of the scheme. That man was caught out, but it makes me wonder: how many others might have already done the same (although perhaps not to the same degree) and gotten away with it?