Edited by Neri Salvadori and Renato Balducci
Chapter 8: Crime, inequality and economic growth
8. Crime, inequality and economic growth Salvatore Capasso 8.1. INTRODUCTION The idea that the level of criminal activity in a society is strictly related to the degree of economic development, and to the distribution of wealth among individuals and classes of individuals, is certainly not new, neither it is really counterintuitive. Despite this consideration, only very recently have economists started to study in complex macroeconomic models the channels of interaction between crime, the incentives to commit crime and economic development and growth. Indeed, in comparison to the wealth of microeconomic literature studying the optimal choice of agents in the presence of incentives to commit criminal offences and rent-seeking behaviour (Glaeser, Sacerdote and Sheinkman, 1996; Fender, 1999; Burdet, Lagos and Randal, 2001; Huang, Laing and Wang, 1999; Lochner, 1999; Gould, Mustard and Weinberg, 2002 among others), the macroeconomic literature on the issue is very thin (Mehhulm, Moene and Torvik, 2001, 2003; Lloyd-Ellis and Marceau, 2003; Josten, 2003). However, only within a general equilibrium macroeconomic framework is it possible to fully grasp the extent to which the crime rate can affect the growth performance of an economic system. One can guess various possible links between the diffusion of criminal activities and economic growth. On the one hand, for example, a low level of economic development entails a higher degree of poverty and, to the extent that poverty is often a major cause of crime, a high level of criminal activity. Moreover, as empirical evidence shows, economic stagnation can further increase the crime...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.