We develop a framework for studying the interactions between organized crime and corruption, together with the individual and combined effects of these phenomena on economic growth. Criminal organizations co-exist with law-abiding productive agents and potentially corrupt law enforcers. The crime syndicate obstructs the economic activities of agents through extortion, and may pay bribes to law enforcers in return for their compliance in this. We show how organized crime has a negative effect on growth, and how this effect may be either enhanced or mitigated in the presence of corruption. The outcome depends critically on a trade-off generated when corruption exists, that between a lower supply of crimes and the probability these crimes are more likely to be successful.
The rapid spread of the COVID-19 pandemic and the prescribed countermeasures of restrictions to mobility and social distancing are disrupting economic activity around the world. This applies to legal economic activity but also to criminal behavior and illegal activity. In this study, we investigate the effects of COVID-19-induced lockdowns on recorded crime in England. The enforcement of lockdowns in the country at both the national and local levels, temporally and spatially, allows unveiling the impact on criminal activities by type of shutdown policy. We use official crime data across the universe of local authorities dating back to May 2013 for all recorded crime categories. We find that (1) National lockdowns decrease all types of criminal behavior, except for anti-social behavior, drug offences and crimes against public order which are recording increases. (2) Relaxing national lockdown restrictions attenuates the initial crime effects of strict lockdowns across all crimes. (3) Local lockdowns affect fewer crime categories, limited to increasing anti-social behavior and weapons possession offences and decreasing bicycle theft and other theft violations, with findings being driven by late-entry areas of such policies. (4) A change in the local lockdown scheme implemented by the government in October 2020 does not have a markedly dissimilar effect on criminal activity compared to the earlier scheme. (5) Back-of-the-envelope calculations suggest that government-mandated lockdowns reduced the economic costs of crime by approximately £4.3 billion for the country as a whole (in 2020 British pounds).
In a companion study, Blackburn et al. (Econ Theory Bull, 2017), we have developed a theoretical framework for studying interactions between organized crime and corruption, with the view of examining the combined effects of these phenomena on economic growth. The analysis therein illustrates that organized crime has a negative effect on growth, but that the magnitude of the effect may be either enhanced or mitigated in the presence of corruption. In this paper we tackle the ambiguity produced by the coexistence of the two illicit activities with an empirical investigation using a panel of Italian regions for the period 1983-2009. We find that organized crime distorts growth less when it coexists with corruption and show our results to be robust to different specifications, measures of organized crime, and estimation techniques.
This paper examines the effects of COVID‐19‐induced lockdowns on recorded crime in England. The enforcement of lockdowns at both the national and local levels allows unveiling the impact on criminal activities by type of shutdown policy. Using official crime data across the universe of local authorities, we find that unlike local lockdowns national lockdowns significantly change the shape of recorded criminal activity, with the first nationally‐imposed lockdown having the strongest impact. Findings also reveal that police operations play a prominent role in explaining changes in reported crimes. Back‐of‐the‐envelope calculations suggest that lockdowns reduced the economic costs of crime by £4.2 billion.
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