Economic Liberalization and Violent Crime
AbstractI study the effect of economic liberalization on violent crime. The particular emphasis is on the case of India, where, in the years following 1991, there was a virtual dismantling of controls on entry and production in registered manufacturing. This was accompanied by a significant reduction in impediments to foreign trade and access to foreign exchange. Economic controls create an incentive for illegal trade, and a frequent by-product of illegal trade is violent crime. Consequently, violent crimes such as murders would be expected to decline following market-based reforms. Analysis of aggregate all-India data, as well as data at the state level, suggests that economic reforms did indeed lead to a reduction in violent crime. I extend the analysis to a panel of countries and find strong evidence that greater trade openness is negatively related to violent crime.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal The Journal of Law and Economics.
Volume (Year): 55 (2012)
Issue (Month): 4 ()
Pages: 925 - 948
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Web page: http://www.journals.uchicago.edu/JLE/
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