The costs of Latin American crime

Many governments are failing in their most basic task

From the print edition | The Americas
Feb 25th 2017

THIS month police in the Brazilian state of Esprito Santo went on strike
for ten days, during which 143 people were murdered and all hell broke
loose in Vitria, the state capital. In Reynosa, on Mexicos 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 worlds 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 regions 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 regions spending on
infrastructure and to the income of the poorest 30% of the population,
points out Laura Jaitman, the reports 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 elsewhereeverything 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.
Esprito Santo shows that even a bad police force is better than none. But
not much better: last year the states 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.

This article appeared in the The Americas section of the print edition
under the headline "Stop the carnage"