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Law enforcement and illegal markets: Evidence from the regulation of junkyards in Brazil

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  • André Mancha

Abstract

I describe how monitoring and harsher law enforcement reduce the expected economic benefits of crime. I investigate the effect of shifts in legal authorities' surveillance by focusing on junkyards, firms often associated with illegal markets and auto theft. Starting in 2014, many municipalities in Brazil increased the monitoring of spare parts sold by junkyards through new regulations at the state level. I show that levels of auto theft dropped significantly after introduction of the new law, and this decrease is more extensive in neighbourhoods containing junkyards.

Suggested Citation

  • André Mancha, 2022. "Law enforcement and illegal markets: Evidence from the regulation of junkyards in Brazil," WIDER Working Paper Series wp-2022-118, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2022-118
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    References listed on IDEAS

    as
    1. Ben Vollaard & Jan C. van Ours, 2011. "Does Regulation of Built‐in Security Reduce Crime? Evidence from a Natural Experiment," Economic Journal, Royal Economic Society, vol. 121(552), pages 485-504, May.
    2. Marco Gonzalez-Navarro, 2013. "Deterrence and Geographical Externalities in Auto Theft," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 92-110, October.
    3. Rodrigo R. Soares & Joana Naritomi, 2010. "Understanding High Crime Rates in Latin America: The Role of Social and Policy Factors," NBER Chapters, in: The Economics of Crime: Lessons For and From Latin America, pages 19-55, National Bureau of Economic Research, Inc.
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    Keywords

    Law enforcement; Crime; Regulation; Law;
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