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Crime and growth convergence : evidence from Mexico

Author

Listed:
  • 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.

Suggested Citation

  • Enamorado, Ted & Lopez-Calva, Luis F. & Rodriguez-Castelan, Carlos, 2013. "Crime and growth convergence : evidence from Mexico," Policy Research Working Paper Series 6730, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6730
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    References listed on IDEAS

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    1. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
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    8. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
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    Cited by:

    1. repec:ere:journl:v:xxxvi:y:2017:i:1:p:79-93 is not listed on IDEAS
    2. Enamorado, Ted & López-Calva, Luis F. & Rodríguez-Castelán, Carlos & Winkler, Hernán, 2016. "Income inequality and violent crime: Evidence from Mexico's drug war," Journal of Development Economics, Elsevier, vol. 120(C), pages 128-143.
    3. Pedro Paulo Orraca Romano, 2015. "Crime Exposure and Educational Outcomes in Mexico," Working Paper Series 7715, Department of Economics, University of Sussex.
    4. Concha Verdugo Yepes & Peter L. Pedroni & Xingwei Hu, 2015. "Crime and the Economy in Mexican States; Heterogeneous Panel Estimates (1993-2012)," IMF Working Papers 15/121, International Monetary Fund.
    5. repec:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0823-8 is not listed on IDEAS
    6. repec:bla:presci:v:96:y:2017:i:3:p:477-494 is not listed on IDEAS
    7. Cazzuffi, Chiara & Pereira-López, Mariana & Soloaga, Isidro, 2017. "Local poverty reduction in Chile and Mexico: The role of food manufacturing growth," Food Policy, Elsevier, vol. 68(C), pages 160-185.
    8. Balmori de la Miyar Jose Roberto, 2016. "The Economic Consequences of the Mexican Drug War," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(3), pages 213-246, August.
    9. Enrique Leonardo Kato Vidal, 2015. "Violence in Mexico: An economic rationale of crime and its impacts," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 12(2), pages 93-108, Julio-Dic.
    10. repec:bla:presci:v:96:y:2017:i:4:p:843-858 is not listed on IDEAS
    11. Germá-Bel & Maximilian Holst, 2016. "“A two-Sided coin: Disentangling the economic effects of the 'War on drugs' in Mexico”," IREA Working Papers 201611, University of Barcelona, Research Institute of Applied Economics, revised Apr 2016.
    12. Álvarez, Antonio & Garduño, Rafael & Núñez, Héctor, 2016. "Modelling the effect of crime on economic activity: The case of Mexican states," Efficiency Series Papers 2016/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    13. Orraca Romano, Pedro Paulo, 2016. "Essays on development and labour economics for Mexico," Economics PhD Theses 0816, Department of Economics, University of Sussex.
    14. Hector M. Nuñez & Dusan Paredes & Rafael Garduño-Rivera, 2017. "Is crime in Mexico a disamenity? Evidence from a hedonic valuation approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 171-187, July.
    15. Fernanda Marquez-Padilla & Francisco Perez-Arce & Carlos Rodriguez-Castelan, 2015. "The (Non-) Effect of Violence on Education Evidence from the "War on Drugs" in Mexico," Working Papers WR-1082, RAND Corporation.

    More about this item

    Keywords

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

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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