Criminality vs. Development and International Trade, Case of Latin America

Abstract

Latin America as a developing region is facing various developing problems, however one of them is the most convex - the high crime rates. High inequality of the region only deepens the negative effect of criminality. Several authors deal with psychological, sociological, historical, legal, political impacts of crime, less attention is paid to the impact of crime on development and international trade involvement. Therefore, we decided to explore whether increased crime is precisely connected to countries with low economic development, and whether countries with an important level of crime have low involvement in the international trade. To confirm this hypothesis, we used econometric regression OLS models. We concluded that development and international trade are complex phenomena, and even in economies with higher development, an increase in crime can occur. We can conclude that crime is not the main factor leading to a decline in economic growth and international trade involvement.