Crime as a Social Cost of Poverty and Inequality: A Review Focusing on Developing Countries



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where q and c are given by’ (3) and (4), m is the number of crimes committed
by each criminal andj is the average cost of criminal justice by criminal.
Note that the actual economic cost of crime, x
~bw , does not appear in
that expression. This is because it is actually7 equivalent to a ‘transfer’ from
victims to criminals and therefore cannot be considered as a social loss12.

Despite its obvious simplicity, the preceding model has several interesting
and important implications for the analysis of crime. Tb understand them
better, however, it is important to make more precise the kind of criminality
that is behind this model. It must be clear, in particular, that the preceding
economic argument better fits crimes against property, which therefore
offer some economic gain, than crimes against persons. It certainly cannot
be ruled out that homicides, intentional or not, are more frequent among
poor and less educated people and in areas where the police is little present.
The homicide rate in a given area may thus be determined very much by7 the
same variables as the rate of‘property crime’. However, given the exceptional
character of this type of crime -when it is not directly7 linked to property
crime as in some robberies- the relationship with these variables is most
likely to be weaker than for property crime. In particular, one expects the
urban bias in criminality to be much less pronounced for homicide than
property crimes. This being said, the argument leading to the crime rate
function (4) applies as well to any illegal activity7 as to the criminal
confiscation of somebody else’s property. Drug dealing, illegal gambling, or
prostitution also fit the basic representation (1) of the decision to undertake
some criminal activity. The only thing is that the reward of that activity
need not be related to the average affluence of victims. For that kind of
crime in (4) should be replaced by some arbitrary value
x, which may
nevertheless still depend on the affluence of society. The relationship
between crime and inequality or poverty would then be somewhat modified.

From the point of view of economic policy, the first arguments in the
general crime function (4) are the most interesting. They indeed suggest
that a process of economic development, or, more precisely; in the present
context a process of urbanization, accompanied by an increase in the rate
of poverty’ or in the degree of inequality713, should lead, other things being

1 a An analysis of the e ffee ts о f cri me on growth alo ng th ese 1 i n cs ɪ s proposed by Sala-i - M arti π ( 19 96 ).
ɪɜ Tb be rcalhτ precise, it can be noted that, in the case where the pen л Ity F is proportional to wealth,
‘poverty* is actually defined by the proportion of people below some poverty line which is proportional

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