Empirical questions about crime and economic freedom

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Though I would expect that one of the benefits of economic freedom and prosperity was safety and security in person and property. There is little to no observable correlation between crime rates and economic freedom. If there was we could have an argument about which came first the chicken or the egg, does a foundational respest for person and property make economies boom, or do booming economies afford the ability to secure person and property. Controlling for OECD and various other things doesn't really help get out a correlation.

The major reason for not seeing correlation here is because international crime data is pretty bad. Not bad in so far as the numbers are false, but bad in so far as the numbers are incomparable with one another. Different countries have different laws and budgets for law enforcement etc. This is desperately trying to be overcome with various statistical techniques. But I'll bet we could use some cruder indicators to get out a decent correlation.

Empirical evidence on proportionality has shown that different countries maintain similar ordinal ranks of criminal severity but they vary in magnitude. Other studies are being done to measure the gap between crime and reported crime. I would argue that the placement of murder in the consistent tops of ordinal scales across countries tells us it can be selected as a good objective proxy for crime across countries. Now if we can get a good proxy for the differences between murders committed and murders reported then we would have a good objective measure of how much people trust the cops in their country and I'd expect to see the correlation with economic freedom a la Claudia Williams style.

Lastly I would expect the correlation to be stronger if we held constant for prison populations of non violent offenders. Ideally this would parse out the fact that some of the violent offenders are violent because of the profit potential for prohibition trades.

Any thoughts are welcome.

3 Comments

theblob said:

1. Official numbers are maybe unreliable and manipulated to the point where they have no use.

2. I wouldn't expect much correlation between economic freedom and crime, more between actual wealth and crime. Also Security plays a big factor and is in most countries highly socialised.

3. So many factors (law, economy, history) play a role in this, that no conclusion can be drawn either way. At least it wouldn't convince me.

Matt C. said:

Dan-
My first thought, before reading the entire post, was "What about nonviolent offenders of prohibited substances?" For example, prohibited drugs in the US and Chewing Gum in Singapore. But it appears you have taken that into consideration.

One thing I was also wondering is why you couldn't do this across the United States? If the crime statistics are not reliable across world state lines, then there could be a correlation between states. I am sure that there is a rating out there for "Economic Freedoms" amongst the states. For example, Michigan might might have lower rating than compared to some other state.

My half cent worth.

Matt C.,

There is econ freedom state by state but with very low variance compared to state by state crime trends. I'll look into a bit more, thanks for the idea.

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This page contains a single entry by Dan published on September 25, 2008 4:49 PM.

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