Does Crime Lower Growth? : Evidence from Colombia

Many analysts consider that lack of security is a major obstacle to growth in Colombia. This paper identifies a structural downturn in economic growth-of nearly two percentage points per year-as a result of the increase in illicit crops and crime r...

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Bibliographic Details
Main Authors:	Cárdenas, Mauricio, Rozo, Sandra
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	ACCOUNTING ANNUAL GROWTH AVERAGE GROWTH BILATERAL TRADE BINDING CONSTRAINT CAPITAL ACCUMULATION CAPITAL FORMATION CAPITAL INFLOWS CAPITAL SHARE CAPITAL STOCK CENTRAL BANK CHECKS CIVIL CONFLICT CLIMATE CHANGE COMMERCIAL CODE COMPANY LAW COMPETITIVENESS CONVENTIONAL WISDOM COUNTRY CASE COUNTRY RISK COVARIANCE MATRIX CURRENCY CURRENCY APPRECIATION DATA SETS DEBT DEBT CRISIS DECENTRALIZATION DECISION MAKING DEPENDENT VARIABLE DERIVATIVE DETERMINANTS OF GROWTH DEVELOPMENT PRACTITIONERS DRUG TRAFFICKING DRUGS DUMMY VARIABLE DUMMY VARIABLES DYNAMIC ANALYSIS ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENTS ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMIC RESEARCH ECONOMICS EDUCATIONAL ATTAINMENT EDUCATIONAL INDICATORS ELASTICITY EMPIRICAL WORK EQUIPMENT ESTIMATED COEFFICIENT ESTIMATION METHOD ESTIMATION RESULTS EXCHANGE RATE EXPLAINING CHANGES EXPLANATORY VARIABLES EXPROPRIATION RISK EXTERNAL SHOCKS EXTREME POVERTY FACTOR ACCUMULATION FACTORS OF PRODUCTION FEDERAL RESERVE FEDERAL RESERVE BANK FEMALE LABOR FORCE FINANCIAL CRISIS FINANCIAL MARKETS FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FIXED EFFECTS FREE TRADE GDP GDP PER CAPITA GINI COEFFICIENT GLOBAL DEVELOPMENT GOVERNMENT EXPENDITURES GOVERNMENT INTERVENTION GROSS DOMESTIC PRODUCT GROWTH DETERMINANTS GROWTH LITERATURE GROWTH MODEL GROWTH PATH GROWTH PERFORMANCE GROWTH RATE GROWTH RATES HIGH TAXES HOUSEHOLD SURVEYS HUMAN CAPITAL IMPORTANT POLICY INCOME INCOME TAX INCREASES IN OUTPUT INDUSTRIALIZED COUNTRIES INFANT INFANT MORTALITY INFLATION INFLATION RATE INFLATION RATES INFRASTRUCTURE INVESTMENT INSTITUTIONAL DEVELOPMENT INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE INVENTORY INVESTMENT RATE LABOR FORCE LABOR INPUT LEGAL STATUS LEGISLATORS LONG RUN LOW BIRTH WEIGHT MACROECONOMIC INSTABILITY MACROECONOMIC PERFORMANCE MILITARY EXPENDITURES MONETARY FINANCING MONETARY FUND MORTALITY RATE NATIONAL ACCOUNTS NATIONAL GOVERNMENT NATURAL RESOURCE NEGATIVE EFFECT NEGATIVE IMPACT 0 HYPOTHESIS OUTPUT GROWTH OUTPUT RATIO PENSIONS PER CAPITA GROWTH PERSONAL INCOME PHYSICAL ASSETS POLICY AREAS POLICY DECISIONS POLICY IMPLICATIONS POLICY MAKERS POLICY POINT OF VIEW POLICY PROPOSALS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLICY RESPONSE POLICY RESPONSES POLITICAL OPPOSITION POLITICAL PARTICIPATION POLITICAL PARTIES POLITICAL STABILITY POPULAR SUPPORT POPULATION CENSUSES POPULATION DATA POPULATION DENSITY POVERTY RATES POVERTY REDUCTION PRIMARY EDUCATION PRODUCTION FUNCTION PUBLIC DEBT PUBLIC EXPENDITURES PUBLIC FINANCES PUBLIC INVESTMENTS PUBLIC SECTOR PUBLIC SPENDING RAPID GROWTH RATE OF GROWTH RATE OF POPULATION GROWTH RATES OF POPULATION RATES OF RETURN RESPECT RETURN RETURNS RISK OF EXPROPRIATION RURAL AREAS RURAL POPULATION RURAL POPULATIONS SECONDARY EDUCATION SECONDARY ENROLLMENT SECONDARY ENROLLMENT RATES SOCIAL CONDITIONS SOCIAL EXPENDITURES SOCIAL INFRASTRUCTURE SOCIAL PROGRAMS SOCIAL PROGRESS SOCIAL SECTORS SOCIAL SECURITY SOCIAL SERVICES SOCIAL TENSIONS SOCIAL UNREST SPILLOVER STANDARD DEVIATION STATE OF KNOWLEDGE STRUCTURAL BREAK STRUCTURAL CHANGE TAX TAX EXEMPTIONS TAX POLICY TAX RATES TAX REVENUES TAX SYSTEM TAXATION TECHNOLOGICAL CHANGE TERRORIST TFP TOTAL EXPENDITURE TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE LIBERALIZATION TRADE VOLUMES TRANSACTION TRANSACTION COSTS TRANSPORTATION UNDERESTIMATES UNEMPLOYMENT WAGES WAR WEALTH WEALTH TAX WEALTH TAXES WORLD FINANCIAL MARKETS WORLD HEALTH ORGANIZATION WORLD INCOME DISTRIBUTION WTO
Online Access:	http://documents.worldbank.org/curated/en/752741468163462405/Does-crime-lower-growth-Evidence-from-Colombia http://hdl.handle.net/10986/28005

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Summary:	Many analysts consider that lack of security is a major obstacle to growth in Colombia. This paper identifies a structural downturn in economic growth-of nearly two percentage points per year-as a result of the increase in illicit crops and crime rates after 1980. A decline in total factor productivity has been the key channel linking crime and economic growth. Political upheavals and high levels of inequality and poverty motivated the adoption of a new constitution in 1991. The constitution mandated additional fiscal expenditures to curb social tensions. Major progress has been made in terms of public safety and, to a lesser extent, in the provision of health and education. However, long?run growth will continue to be constrained by inadequate transport infrastructure and low international trade volumes.

Does Crime Lower Growth? : Evidence from Colombia

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