CRIMINALITY AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM BRAZIL FROM 1995 TO 2014
Crime; Economic Growth; Causality; Effects of crime.
This work aims to estimate the effects of crime on economic growth and brings as a contribution an approach to the economics of crime and its impact on economic activity. To do so, it uses a Pooled Mean Group approach to estimate the effects that crime and a set of economic variables have on Brazilian economic growth. The case study covers the period from 1995 to 2014. A causality test is used to establish temporal interrelationships. Empirical evidence shows that crime has a significant negative effect on growth. We also analyzed the regions and Northeast and Center-South also have negative effects of crime on growth. The national scenario shows a reduction of 0.0608% and 0.0624% for total homicides and homicides among young people, respectively, and the Northeast region has the greatest effect -0.3256%. In addition, we did a causality test and found temporal precedence of crime over economic growth.