Gary S. Becker, 1992 U of Chicago Nobel laureate, wrote an article in the current issue of Business Week entitled "How the U.S. Handcuffed the Crime Rate". Excerpts:
"The most important improvement in the conditions of daily living in the U.S. during the past two decades is due not to low unemployment or continued prosperity but to the sizable fall in crime. Many factors contributed to the lower rates, but the single most important one has been the greater apprehension and punishment of criminals....
Some intellectuals have perpetrated an enormous myth - and delayed effective policies - by claiming that crime is not deterrable, that it is related in an unbending way to poverty, and that it can be reduced only by drastic social reforms. In fact, the U.S. has shown that the poor and others can be deterred by stacking the odds against criminals."
The article is much longer, of course, and Becker supports his conclusions with reference to various studies and trends. Interesting reading.