Mitchell, Livvy2026-06-072026-06-072025-10-09New Zealand Economic Papers, ISSN: 0077-9954 (Print); 1943-4863 (Online), Informa UK Limited, ahead-of-print(ahead-of-print), 1-21. doi: 10.1080/00779954.2025.25656300077-99541943-4863http://hdl.handle.net/10292/21334The economic theory of crime posits that crime rates will decrease if the expected costs of crime exceed the expected benefits. The expected costs of crime are positively correlated with the probability of apprehension and the punishment if caught. This paper tests the effect of non-custodial punishments on recidivism by exploiting a large-scale sentencing reform in New Zealand. Regression discontinuity design estimates suggest that, relative to short-term imprisonment, receiving a non-custodial sentence after the 1 October 2007 policy significantly increases first-time offenders’ recidivism rate by 8.7% after one year, 9.5% after two years, and 9.6% after five years. However, these effects largely stem from serious breaches of non-custodial sentence conditions, highlighting that administrative non-compliance, rather than substantive new criminal activity, is the primary driver of the increased recidivism.© 2025 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.http://creativecommons.org/licenses/by-nc-nd/4.0/38 Economics3502 Banking, Finance and Investment3801 Applied Economics35 Commerce, Management, Tourism and Services16 Peace, Justice and Strong Institutions1401 Economic Theory1402 Applied EconomicsJournal ArticleOpenAccess10.1080/00779954.2025.2565630