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Crime and growth convergence : evidence from Mexico

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  • Enamorado, Ted
  • Lopez-Calva, Luis F.
  • Rodriguez-Castelan, Carlos

Abstract

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 Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6730.

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Date of creation: 01 Dec 2013
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Handle: RePEc:wbk:wbrwps:6730

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Related research

Keywords: Crime and Society; Public Sector Corruption&Anticorruption Measures; Achieving Shared Growth; International Terrorism&Counterterrorism; Corruption&Anticorruption Law;

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  1. Doug Miller & A. Colin Cameron & Jonah B. Gelbach, 2006. "Bootstrap-Based Improvements for Inference with Clustered Errors," Working Papers, University of California, Davis, Department of Economics 621, University of California, Davis, Department of Economics.
  2. Gabriela Calderon & Gustavo Robles & Beatriz Magaloni, 2013. "Economic Consequences of Drug-Trafficking Violence in Mexico," Research Department Publications, Inter-American Development Bank, Research Department IDB-WP-426, Inter-American Development Bank, Research Department.
  3. Demombynes, Gabriel & Ozler, Berk, 2002. "Crime and local inequality in South Africa," Policy Research Working Paper Series 2925, The World Bank.
  4. Harold Alderman & Miriam Babita & Gabriel Demombynes & Nthabiseng Makhatha & Berk �zler, 2002. "How Low Can You Go? Combining Census and Survey Data for Mapping Poverty in South Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 11(2), pages 169-200, June.
  5. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
  6. Stone, Christopher, 2006. "Crime, Justice, and Growth in South Africa: Toward a Plausible Contribution from Criminal Justice to Economic Growth," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp06-038, Harvard University, John F. Kennedy School of Government.
  7. Chris Elbers & Jean O. Lanjouw & Peter Lanjouw, 2003. "Micro--Level Estimation of Poverty and Inequality," Econometrica, Econometric Society, Econometric Society, vol. 71(1), pages 355-364, January.
  8. Claudio Detotto & Edoardo Otranto, 2010. "Does Crime Affect Economic Growth?," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 63(3), pages 330-345, 08.
  9. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(2), pages 223-51, April.
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