Perpetrators of violent crime can impact economies in a variety of ways, from encouraging emigration and brain drain to discouraging foreign direct investment. In many parts of the developing world, violent crime related to gang activity has risen to crisis levels, negatively impacting people, property and business activity. These issues periodically gain media visibility, but the true scope of the problem worldwide is seldom captured.

In a globalized world, of course, analysis of criminal activity often cannot be limited to domestic contexts. In October 2012, the issue was spotlighted when the United States Treasury Department formally designated the Mara Salvatruch gang (known as MS-13) as a “transnational criminal organization.” The El Salvadorean-based group, with an estimated 30,000 to 50,000 members worldwide — including a substantial presence in Los Angeles — is one of many such organizations whose reach is global but whose negative impacts are felt most acutely in the countries from which they originate.

Though the total costs of violent crime in the developing world are difficult to calculate, country-specific estimates highlight the depth and seriousness of the problem. According to the United Nations and World Bank, in 2007 violent crime cost Guatemala an estimated $2.4 billion or 7.3% of GDP; the Mexican government estimated the costs of violence in 2007 at $9.6 billion, primarily from lost investment, local business and jobs. The U.N. and World Bank also estimated that, in 2007, Jamaica and Haiti could have increased their GDP by 5.4% merely by bringing down their crime levels to that of Costa Rica.

Below is a representative sample of research in this emerging field:

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“The Costs of Violence”
Miller, Stephen C., et al. The World Bank, Social Development Department, March 2009.

Excerpt: “In today’s world, it is well accepted that violence exacts a high cost on global development. In about 60 countries over the last ten years, violence has significantly and directly reduced economic growth. It has hampered poverty reduction efforts and limited progress towards the Millennium Development Goals. About half of these countries experience violent conflict or are in post-conflict transition. The other half experience high levels of violent crime, street violence, domestic violence, and other kinds of common violence. Common violence often increases significantly in post-conflict countries after large-scale politically motivated violence ends. Such cases include Somalia, Liberia, Guatemala, and El Salvador. Conversely, countries with high levels of common violence have shown tendencies toward sporadic large-scale instability, for example Kenya (in the form of ethnic violence) and Brazil (in the form of urban riots).”

 

“Political Order, Development and Social Violence”
Fox, Sean, et al. Journal of Peace Research, May 2012, Vol. 49, Issue 5.

Abstract: “Why are some countries more prone to social violence than others? Despite the fact that annual deaths due to homicides worldwide outnumber those due to armed conflict by a factor of roughly 3 to 1, this question has received very little attention from conflict and development specialists in recent years. As a modest first step in addressing this gap in the literature we draw together insights from the conflict and criminology literatures to develop a model of social violence that accounts for both political-institutional and socio-economic factors. While there is an extensive literature on the socio-economic determinants of social violence, there are only a handful of studies that consider the significance of political-institutional arrangements. Using cross-country estimates of homicides produced by the World Health Organization as an indicator of social violence, we test our model using OLS regression analysis for a sample of more than 120 countries. We find that countries with ‘hybrid’ political orders experience higher rates of social violence than those with strong autocratic or strong democratic regimes, and that weakly institutionalized democracies are particularly violent. We also find robust associations between indicators of poverty, inequality and ethnic diversity and social violence. These results indicate that social and political violence share some common underlying causes. We conclude by suggesting that the apparent global decline in armed conflict and the concomitant rise in social violence in recent decades may be linked to world urbanization and the ‘third wave’ of democratization in the global South, although further research is required to confirm this hypothesis.”

 

“The Globalization of Crime: A Transnational Organized Crime Threat Assessment”
United Nations Office on Drugs and Crime, 2012.

Findings: “Drugs appear to generate the most dangerous flow of profits, followed by environmental resources. Individual traffickers may make tens of millions, if not hundreds of millions, of dollars in a relative small number of transactions. Production areas are often affected by insurgency, and transit countries often suffer both from either high rates of murder, high levels of corruption, or both. With core demand generated by a consumer base of addicts, drugs also represent a long-term source of income for organized crime groups. But drug flows also illustrate that it does not take a lot of money to cause a lot of damage.”

 

“Crime and Violence in Central America: A Development Challenge”
Serrano-Berthat, R.; Lopez, H. 2011. The World Bank, Sustainable Development Department, Poverty Reduction and Economic Management Unit, Latin America and the Caribbean Region.

Summary: “Crime and violence are now a key development issue for Central American countries. In three nations — El Salvador, Guatemala and Honduras — crime rates are among the top five in Latin America. In the region’s other three countries — Costa Rica, Nicaragua and Panama — crime and violence levels are significantly lower, but a steady rise in crime rates in recent years has raised serious concern. There is reason to worry.” The key drivers of crime and violence in the region are drug trafficking, youth violence and gangs, an abundance and high availability of firearms, and a lack of developed criminal justice institutions. The report suggests that crime reduction in the region will be a long term process, and suggests policy makers utilize preventive strategies, reduce the amount of available firearms, and provide alternative opportunities for at risk youth, among other policy tools.

 

“United Nations 2011 Global Study on Homicide”
United Nations Office on Drugs and Crime, 2011.

Findings: In 2010 the total number of homicides globally was estimated to be 468,000. More than a third (36%) were estimated to have occurred in Africa, 31% in the Americas, 27% in Asia, 5% in Europe and 1% in the tropical Pacific region. Since 1995, the homicide rate has been falling in Europe, North America, and Asia, but has risen to a near “crisis point” in Central America and the Caribbean. Factors contributing to the rising levels of homicide include: the economic crisis; food insecurity due to environmental changes; inflation; and weak or limited rule of law. Indeed, these patterns are reflected in the fact that the “largest shares of homicides occur in countries with low levels of human development, and countries with high levels of income inequality are afflicted by homicide rates almost four times higher than more equal societies.” In the Americas, more than 25% of homicides are related to “organized crime and the activities of criminal gangs”; the same is only true of approximately 5% of homicides in the Asian and European countries for which data are available.

 

“The Rule of Law and Economic Growth: Where Are We?”
Haggard, Stephen, et al. World Development, Vol. 39, Issue 5, May 2011.

Abstract: “It is widely assumed that the rule of law is essential for economic growth. However, the rule of law is clearly a multidimensional concept, encompassing a variety of discrete components from security of person and property rights, to checks on government and control of corruption. We review the theory underlying these different causal mechanisms linking the rule of law to economic growth, and provide an introduction to some outstanding measurement issues. We find that the correlation among different components of the rule of law concept are not tight among developing countries and that some inferences about the effects of property rights protection may not be warranted.”

 

“Violence in the City: Understanding and Supporting Community Responses to Urban Violence”
Alda, Erik. The World Bank, Social Development Department, April 2011.

Excerpt: “For millions of people around the world, violence, or the fear of violence, is a daily reality. Much of this violence concentrates in urban centers in the developing world. These cities are home to half of the world’s population and are expected to absorb almost all new population growth over the next 25 years (UN-HABITAT 2007). In many cases, the scale of urban violence can eclipse that of open warfare. Some of the world’s highest homicide rates occur in countries that have not undergone wars but have violence epidemics in their urban areas. Concern over these experiences has made urban violence a central preoccupation of policymakers, planners, and development practitioners…. Some cities, especially in Latin America and Africa, are struggling with high levels of violence that undermine the very foundations of the economic and social development of the entire population. In some cases, areas of the city have deteriorated into ‘no-go zones’ that undermine the overall governance of the area and trap the poorest population in a dangerous cycle of poverty and violence.”

 

“Kidnap Risks and Migration: Evidence from Colombia”
Rodriguez, C.; Villa, E. Journal Of Population Economics, 2011, Vol. 25, Issue 3, 1139-1164.

Abstract: “Using a unique data set from the major Colombian cities collected between 2000-2003 and with information on more than 12,000 households, this paper studies the relationship between the kidnap risk a household faces with its migration decisions. We find evidence that exposure to such risk induces households to react by sending some of their members to an international destination but not necessarily to a domestic one. Estimates are robust to the inclusion of several household characteristics usual in the migration literature, other crime risks, reported feelings of insecurity of the household, and an alternative measure of kidnap risk.”

 

“Is It Just About the Crime? A Psychological Perspective on South African Emigration”
Marchetti-Mercer, M. C. South African Journal of Psychology, 2012, Vol. 42, Issue 2, 243-254.

Findings: “Understanding the motivation behind the decision to emigrate may be valuable, because it is likely to affect eventual adaptation. Emigrants convinced they are being pushed out of their country may experience additional problems and stress…. The participants’ varied responses suggest that there is no single reason driving people to emigrate, but rather a complex interaction of factors. Push factors varied from some concerns about socio-political issues and safety … although it was identified as the primary reason for emigrating only in one case, to fear of HIV/AIDS (reported by the Zulu-speaking participant), and a sense of no longer belonging (reported by a number of Afrikaans-speaking participants, who felt they were associated with the previous regime, with little future in South Africa — interestingly, despite not feeling at home in South Africa, they chose an English-speaking country where the issue of belonging might remain relevant). There were also some prominent pull factors, such as a need for change and a desire for better opportunities for the family.”

 

“Sex Trafficking: Trends, Challenges and Limitations of International Law”
Smith, H.M. Human Rights Review, 2011, Vol. 12, No. 3, 271-286.

Findings: Although the situation of modern slaves does not conform to the classical definition of slavery, they are “subject to brutality and violence, forced to work and paid little to nothing for their servitude.” Since 2000, the number of sex-trafficking victims has risen while costs associated with trafficking have declined. “Coupled with the fact that trafficked sex slaves are the single most profitable type of slave, costing on average $1,895 each but generating $29,210 annually, leads to stark predictions about the likely growth in commercial sex slavery in the future.” In 2008, 12.3 million individuals were classified as “forced laborers, bonded laborers or sex-trafficking victims.” Approximately 1.39 million worked as commercial sex slaves, with women and girls comprising 98%, or 1.36 million, of this population. Governments often underreport the prevalence of sex trafficking within their countries due to unreliable statistics, corruption or concerns about their international reputation. Financial incentives linked to sex trafficking can also be a factor: “Between 1993 and 1995, the [International Labour Organization] estimated that between 2% and 14% of the Indonesian, Philippine, Malaysian and Thai GDPs were earned through sex tourism.”

 

“Crime, Violence, and Development in the Caribbean”
The United Nations Office on Drugs and Crime and the Latin America and the Caribbean Region of the World Bank. 2007. Report No. 37820.

Summary: This 2007 study by the World Bank, in collaboration with the United Nations Office on Drugs and Crime (UNODC), examines the impact of violent crime on economic development in the Caribbean. The study finds that the drug trade is the primary source of crime and violence in the Caribbean, and that the geography of the region allows it to be a primary transit point for narcotics, while also making it very difficult to control movement of these narcotics. The study also finds that this violence has a strong negative impact on GDP, and that the failure to control this violence is a result of overdependence on the criminal justice system. Overall, the study suggests that policymakers should find alternative methods of combating violence including: crime prevention through environmental design (CPTED), integrated citizen security approaches, and public health approaches, among other potential policy interventions.

 

“Crime Victimization in Latin America and Intentions to Migrate to the United States”
Wood, C. H.; Gibson, C. L.; Ribeiro, L.; Hamsho-Diaz, P. International Migration Review, 2010, Vol. 44, No. 1, 3-24.

Abstract: “Among the challenges faced by Latin America at the onset of the 21st century is the increase in crime and violence that began in the mid-1980s, and which, to one degree or another, has afflicted most countries in the region. In this study we explore the potential implications of the upsurge in crime on migration by testing the hypothesis that crime victimization in Latin America increases the probability that people have given serious thought to the prospect of migrating with their families to the United States. Using Latinobarometro public opinion surveys of approximately 49,000 respondents residing in 17 countries in 2002, 2003, and 2004, the results of a Hierarchical Generalized Linear Model found that, net of individual and country-level control variables, the probability of seriously considering family migration to the United States was around 30% higher among respondents who reported that they or a member of their family was a victim of a crime sometime during the year prior to the survey. Evidence that victimization promotes the propensity to emigrate is a finding that contributes to an understanding of the transnational consequences of the increase in crime in Latin America, and adds a new variable to the inventory of factors that encourage people to migrate to the United States.”

 

“Crime, Justice, and Growth in South Africa: Toward a Plausible Contribution from Criminal Justice to Economic Growth”
Stone, Christopher. Center for International Development, Harvard Kennedy School, 2006.

Abstract: “Crime in South Africa is high and widely believed to restrain investment. Nevertheless, both the mechanisms through which crime constrains growth and the actions that might be taken to loosen its grip are poorly understood. In light of the limited knowledge in the field and the limited capacity of criminal justice institutions, this paper proposes focusing on two issues: (1) the costs of crime to business, especially household-based enterprises in low-income settlements, and (2) the perception of violent crime. In both cases, the paper proposes a cyclical process of iterative innovation in which government seeks to solve narrowly circumscribed crime problems, and then leverages each success to generate wider hope and confidence in the criminal justice system.”

 

“Procedural Justice, Police Legitimacy, and Helping the Police Fight Crime Results From a Survey of Jamaican Adolescents”
Reisig, Michael D. Police Quarterly, March 2009, Vol. 12, No. 1.

Abstract: “Drawing on procedural justice theory and research, this study uses survey data from a sample of Jamaican high school students (N = 289) to evaluate hypotheses derived from the process-based model of policing. Findings reveal that the correlation between procedural justice judgments and police legitimacy is positive and statistically significant. Students who rate police practices more favorably in terms of procedural justice also report a greater willingness to help the police fight crime (e.g., report suspicious activity to the police) in their community. In combination, the findings show that these two key process-based model hypotheses generalize to the Jamaican context. Although the correlation between police legitimacy and behavioral cooperation is in the expected direction, the relationship is not statistically significant. The findings also show that students from impoverished local communities dominated by ‘area dons’ are less willing to help the police fight crime.”

 

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