Crime and Growth Convergence : Evidence from Mexico

Crime and Growth Convergence : Evidence from Mexico

Scholars have often argued that crime deters growth, but the empirical literature assessing such effect is scarce. By exploiting cross-municipality income and crime data for Mexico -- a country that experienced a high increase in crime rates over the past decade -- this study circumvents two of the most common problems faced by researchers in this area. These are: (i) the lack of a homogenous, consistently comparable measure of crime and (ii) the small sample problem in the estimation. Combining income data from poverty maps, administrative records on crime and violence, and public expenditures data at the municipal level for Mexico (2005-2010), the analysis finds evidence indicating that drug-related crimes indeed deter growth. It also finds no evidence of a negative effect on growth from crimes unrelated to drug trafficking.

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Bibliographic Details
Main Authors: Enamorado, Ted, López-Calva, Luis F., Rodriguez Castelan, Carlos
Language:English
en_US
Published: World Bank, Washington, DC 2013-12
Subjects:ARMED FORCES, ASSASSINATION, CELLS, COLLAPSE, CORRUPTION, CRIME, CRIME RATE, CRIME RATES, CRIMES, CRIMINAL, CRIMINAL ACTIONS, CRIMINAL JUSTICE, DEPENDENT VARIABLE, DESCRIPTIVE STATISTICS, DEVELOPMENT POLICY, DRUG, DRUG TRAFFIC, DRUG TRAFFICKING, ECONOMIC ACTIVITY, ECONOMIC CONSEQUENCES, ECONOMIC GROWTH, ECONOMICS, EMPIRICAL EVIDENCE, EMPIRICAL LITERATURE, ERROR TERM, FIREARMS, GROWTH RATE, HIGH INCOME COUNTRIES, HOMICIDE, HOMICIDE RATE, HOMICIDE RATES, HOMICIDES, INCOME DATA, INCOME GROWTH, INVESTIGATION, INVESTMENT CLIMATE, LABOR FORCE, LAGGED VALUES, LAW-ENFORCEMENT, LEADERSHIP, LEVELS OF CRIME, MURDER, MURDERS, NATIONAL SECURITY, NEGATIVE EFFECT, NEGATIVE IMPACT, NEGATIVE SIGN, ORGANIZED CRIME, PER CAPITA INCOME, POLICY RESEARCH, POVERTY REDUCTION, PRISON, PUBLIC EXPENDITURES, RAPID GROWTH, SECURITY COSTS, SOCIAL SECURITY, STANDARD DEVIATION, THEFT, THREAT, TORTURE, URBAN AREAS, VANDALISM, VICTIMS, VIOLENCE, VIOLENT CRIME, spatial inequality, convergence,
Online Access:http://documents.worldbank.org/curated/en/2013/12/18683099/crime-growth-convergence-evidence-mexico
https://hdl.handle.net/10986/16946
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Summary:Scholars have often argued that crime deters growth, but the empirical literature assessing such effect is scarce. By exploiting cross-municipality income and crime data for Mexico -- a country that experienced a high increase in crime rates over the past decade -- this study circumvents two of the most common problems faced by researchers in this area. These are: (i) the lack of a homogenous, consistently comparable measure of crime and (ii) the small sample problem in the estimation. Combining income data from poverty maps, administrative records on crime and violence, and public expenditures data at the municipal level for Mexico (2005-2010), the analysis finds evidence indicating that drug-related crimes indeed deter growth. It also finds no evidence of a negative effect on growth from crimes unrelated to drug trafficking.

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