Here's a pretty good paper titled "Understanding Why Crime Fell in the 90s: Four Factors That Explain the Decline and Six Factors That do Not" it's written by Steven Levitt the author of Freakonomics.

http://pricetheory.uchicago.edu/levitt/Papers/LevittUndersta...

>Four factors appear to explain the drop in crime: increased incarceration, more police, the decline of crack and legalized abortion.

Other factors often cited as important factors driving the decline do not appear to have played an important role: the strong economy, changing demographics, innovative policing strategies, gun laws and increased use of capital punishment. In stark contrast, the crime experience between 1973 and 1991 is not well explained by the factors identified in this paper. The real puzzle in my opinion, therefore, is not why crime fell in the 1990s, but why it did not start falling sooner.