## Higher Growth. Lower Crime?

_IMF Blog, February 24, 2020_

## Source details

**Canonical URL:** [Higher Growth. Lower Crime?](https://www.imf.org/en/blogs/articles/2020/02/24/blog-higher-growth-lower-crime)

## Other formats

- [Markdown version](/en/blogs/articles/2020/02/24/blog-higher-growth-lower-crime/index.md)
- [Structured JSON version](/en/blogs/articles/2020/02/24/blog-higher-growth-lower-crime/index.json)
- [Bundle manifest](/en/blogs/articles/2020/02/24/blog-higher-growth-lower-crime/bundle-manifest.json)

## Bibliographic details
- Authors: Dmitry Plotnikov
- Published: February 24, 2020

---

### Regional context and trends
- Central America remains one of the world’s most violent regions, where about 4.5 percent of the world’s homicides occur. The region has only about 0.5 percent of the world's population.
- Homicide rates have fallen since 2015, largely thanks to increased security efforts by the region’s governments:
  - El Salvador: 108.6 to 36 (per 100,000 inhabitants, 2019)
  - Guatemala: 29.7 to 21.5 (per 100,000 inhabitants, 2019)
  - Honduras: 63.8 to 41.5 (per 100,000 inhabitants, 2019)
- Economic activity increased in the “Northern Triangle” countries of El Salvador, Guatemala, and Honduras during the same period.

### Quantitative findings
- Evidence from a recent IMF staff paper and the Chart of the Week indicates a measurable negative relationship between output and crime in the Northern Triangle.
- Honduras (2016): a 1 percent increase in observed GDP per capita, driven by higher labor productivity, would lower crime by about 0.5 percent.
- El Salvador: a 1 percent increase in output decreases crime by ⅔ percent.
- Guatemala: the effect of a 1 percent increase in output on crime is the same as in Honduras (about 0.5 percent).
- The chart suggests that the positive effects of better economic activity on crime are similar across a broad set of medium-crime levels.

### Mechanisms — how growth reduces crime
- As productivity and economic activity go up, overall incomes rise and individuals face stronger incentives to engage in legal activity (for example, paid work in the manufacturing sector or owning a small business).
- Criminal activity becomes less attractive when legitimate employment opportunities and stable wages increase.
- Current criminals are less likely to commit high-paying illegal activities, such as extortion, when legal job opportunities provide job security and stable wages.
- Positive spillovers:
  - More productive workers and lower security costs increase firm profits.
  - Higher firm profitability encourages new firms to enter the market or existing firms to expand, boosting vacancies and employment.

### Risks and constraints
- The downside: economic instability or a growth slowdown are detrimental for the security situation.
- Widespread poverty, lack of economic opportunities, and perceived corruption make criminal activity a viable option for some, contributing to high crime in Northern Triangle countries.

### Policy implications and recommendations
- Tough-on-crime policies (for example, “Mano Dura” in El Salvador) often misfire.
- Policies aimed at reintegration of convicts into the productive economy (such as in the manufacturing or services sectors) appear more beneficial.
- Broader growth-promoting policies that are key to strengthening and sustaining reduction in crime include:
  - Better infrastructure
  - Lower barriers to entry for new firms
  - More-efficient tax systems

*Dmitry Plotnikov, February 24, 2020 — IMF Chart of the Week blog post*

---

## Content in this bundle

- **BoletíN_aa**
  - [BoletíN_aa (Markdown version)](/iudop/wp-content/uploads/BOLETI%CC%81N_AA.pdf.md){rel="alternate" type="text/markdown"}
  - [BoletíN_aa (PDF)](/iudop/wp-content/uploads/BOLETI%CC%81N_AA.pdf){rel="external" type="application/pdf"}

---

## References

- [Español,](https://blog-dialogoafondo.imf.org/?p=12875)
- [Português](https://www.imf.org/pt/News/Articles/2020/02/25/blog-higher-growth-lower-crime?sc_mode=1)
- [paper](https://www.imf.org/en/Publications/WP/Issues/2020/01/16/Crime-and-Output-Theory-and-Application-to-the-Northern-Triangle-of-Central-America-48799)
- [https://www.imf.org/wp-content/uploads/2020/02/eng-feb-18-lowering-high-crime-2.jpg](https://www.imf.org/wp-content/uploads/2020/02/eng-feb-18-lowering-high-crime-2.jpg)
- [misfire](https://www.bookstore.imf.org/books/title/paving-the-way-to-sustained-growth-and-prosperity-in-central-america-panama-and-the-dominican-republic)

_Source: https://www.imf.org/en/blogs/articles/2020/02/24/blog-higher-growth-lower-crime_