The costs of Latin American crime

THIS month police in the Brazilian state of Espírito Santo went on strike for ten days, during which 143 people were murdered and all hell broke loose in Vitória, the state capital. In Reynosa, on Mexico’s border with the United States, two alleged robbers were beaten, bound with duct tape and dangled from a footbridge, with a message from a drug baron pinned to them. On February 17th a gunman killed five people and injured nine at a shopping centre in Lima. A day later in Flores Costa Cuca, a small town in western Guatemala, an 83-year-old woman and her disabled grandson were murdered, prompting calls for the army to patrol the streets.

A casual scan of newspapers in Latin America and the Caribbean in any week reveals a grave problem: violent crime has become an epidemic. The region accounts for only 9% of the world’s population but 33% of its murders. Its homicide rate of 24 per 100,000 people is four times the world average. Worryingly, murders have become more common even as socioeconomic conditions have improved (see chart). Robberies are increasing, too; some 60% involve violence. No wonder polls show that crime has replaced the economy as the main public concern in Latin America.

As well as inflicting immeasurable suffering, violent crime is a big obstacle to economic development. In a pioneering report published this month, researchers at the Inter-American Development Bank (IDB) set out to measure its impact on the region’s economies. In the average Latin American country the annual cost of crime is 3.6% of GDP, they reckon.

That may not sound much, but it is twice as high as the equivalent figure in developed countries and is equal to the region’s spending on infrastructure and to the income of the poorest 30% of the population, points out Laura Jaitman, the report’s lead author. She stresses that this is a conservative estimate: it covers only the income lost by the victims of crime and by prisoners; private spending on security by firms (in the formal economy) and households; and public spending on policing, the criminal courts and prisons. Factor in indirect costs, such as investment forgone, and the true cost of crime is higher.

The average conceals wide variations. In Honduras the cost of crime is a whopping 6.5% of GDP, for example. Chileans, by contrast, are less likely to be murdered than inhabitants of the United States. Murder rates and the cost of crime in different parts of Brazil vary as widely as they do across the region as a whole.

Organised-crime syndicates, with origins in the drug trade, help to explain why murders have soared in recent years in Mexico, parts of Central America, Venezuela and parts of Brazil. But the problem of violent crime goes well beyond the drug gangs. In some ways crime in Latin America is similar to that in the rich world. It is highly concentrated in certain parts of certain cities. The vast majority of perpetrators and victims are young men. Often they are badly educated and come from broken families.

A new report by the World Bank recommends strategies to prevent crime that have worked elsewhere—everything from early-childhood education to focusing police work on crime “hot spots”. That would certainly be an improvement on the “iron-fist” approach favoured by many Latin American politicians, which involves mass incarceration for long periods in hellish prisons and the application of a de facto death penalty by security forces against young male suspects.

Yet if crime is so much more prevalent in Latin America than in other regions it is surely because the returns from it, relative to those in the legal economy, are higher and, especially, because the chances of being caught are lower. Less than 10% of murders in the region are solved.

That highlights two fundamental failures. The first is that too many young men command only low-paying and insecure legal jobs. Some 20m 15- to 24-year-olds in the region neither study nor work at all. This points to the need for targeted skills programmes.

Second, the police, the courts and the prisons often fail to do their jobs. Espírito Santo shows that even a bad police force is better than none. But not much better: last year the state’s murder rate was still 37.4 per 100,000 people.

Not all is gloom. Colombia and other parts of Brazil have seen sustained falls in murder rates, partly because of better policing. In Chile this month a Spaniard was arrested for attempting to bribe a policeman (with 30,000 pesos, worth $47). Elsewhere, though, many governments are failing in their most basic duty, to keep their citizens safe.

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