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

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importance of publie safety collected in the 1966 Brazilian Living Standard
Measurement Survey, these authors find that the current valuation of public
safety and the desire for improving it are increasing functions of
households’ standard of IMng. The unequal valuation of public safety is an
important result. It means that crime and crime deterrence measures are
another source of inequality in an urban environment. In other words, if
erime is partly the consequence of existing economic inequalities, its
uneven geographical distribution may contribute to a magnification of
these inequalities. The second important result is not so much that the
desire for publie safety is increasing with income but that it does so at a
declining rate. This means that increasing inequality should lead to a
lower aggregate demand of public safety. However, this is only partial
subjective evidence and much more work is necessary to get a better idea
of the relationship between inequality and the social demand for safety.

4. Conclusion

It was shown in this paper that crime and violence are likely to be a socially
costly by-product of, among other factors, uneven or irregular economic
development processes. Simple economic theory shows how property⁷ crime
and, more generally, all the violence that may be associated with illegal
activity may partly be the consequence of excessive inequality and poverty.
Limited available evidence in this field suggests that an increase in the
degree of relative poverty or income inequality in a country generally leads
to a rise in criminality, be it the actual crime rate or the propensity to
commit crime in that part of the population not confined to prison. By
increasing the extent of poverty, major recessions may have an effect of
comparable amplitude on crime. Moreover, hysteresis, in the way crime
changes over time in a given society, of which there also is evidence, may
considerably magnify these effects. It follows that, through crime and
violence, the social cost of inequality and poverty may be large. In countries
where the level of crime is already high, it is not unreasonable to think
that severe recessions of the type that was witnessed by several developing
countries in the recent past or major increases in inequality measures
comparable to what was observed in several countries during the 1980s
could be responsible for social losses as high as 2 or 3 per cent t>f GDP. This
order of magnitude would even be greater if only urban areas where most
of that increase in criminality is likely to take place were considered.

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