Development, Crime and Punishment

Dr. Gholamhossein Biabani; Secretary of the Iranian Association for the Development of Detective Science and Innovation Studies

It examines the behavior of reporting rates by comparing data from victimization surveys with official records. Reported crime rates are strongly correlated with development: richer countries report a larger share of crimes.

In this paper, we show that the positive relationship between development and crime found in previous research stems from this correlation. When reporting errors are accounted for, development has no effect on crime. Reductions in inequality and increases in economic growth and education are associated with lower crime rates.

Crime rates vary widely across countries, and the cross-country variation is many times larger than the variation within a country over time.

For example, the number of homicides per 100,000 people (perhaps the most commonly cited crime statistic) is 17 in Mexico and 0.6 in Japan. Meanwhile, changes in homicide rates within a country, even over very long periods, rarely exceed 20%.

Many explanations for these cross-country differences are plausible, ranging from different definitions of crimes and different reporting rates (i.e., the percentage of total crimes reported to the police) to real differences in crime occurrence (due to natural conditions, economic development, culture, and region).

The aim of this note is to analyze the reasons for these differences in crime rates across countries, with particular attention to reported rates and development.

Economic theory of crime provides a natural theoretical framework for such analysis. Within this framework, criminals respond to economic incentives in the same way lawful workers do.

Specifically, the attractiveness of criminal activity is closely related to variables that undergo major changes during economic development (such as income distribution, per capita income, and institutional development). Thus, this observed relationship between development and crime naturally invites an economic interpretation.

Accordingly, in this essay we examine how the changes typically associated with economic development affect crime rates. In attempting to assess this question, we encounter the traditional problem of underreporting in international data. To address this issue, a new victimization survey is used alongside a panel of official records.

Using these two datasets allows us to analyze and control for reporting errors. Consequently, our findings indicate that the positive relationship between crime and development (often cited in criminology but viewed skeptically by economists) does not actually exist.

Crime reporting rates are strongly related to development, especially per capita income. Therefore, the positive correlation between crime and development sometimes reported arises from exclusive reliance on official reports. Development does not generate crime.

When a correction process is used to account for reporting errors, evidence suggests that economic development appears unrelated to crime rates. Wage inequality positively affects crime rates, while education and economic growth reduce crime.

Source: Asre Eghtesad