Crime and Economic Growth: Evidence from India

Kumar, Surender (2013): Crime and Economic Growth: Evidence from India.

Abstract

This paper empirically examines the causality between crime rates and economic growth using state level data in India. A reduced form equation has been estimated using instrumental variable approach to correct for joint endogeneity between crime and economic growth. Higher crimes may reduce level of per capita income and its growth rate. Controlling intentional homicide and robbery rates in each of the states to the minimum level they observed during 1991-2011 period, the predicted annual growth in per capita income could have been higher by 1.57 and 1.2 percentage points, respectively. The average annual gain in growth rate by bringing down the homicide rate at a level of national minimum could be 0.62 percentage points. Note that the loss in growth rate is lower or negative in the states that have higher per capita income.

• Item Type: MPRA Paper
• Language: English
• Keywords: Crime, economic growth, panel data, India.
• Subjects: H - Public Economics > H1 - Structure and Scope of Government > H10 - General; H - Public Economics > H4 - Publicly Provided Goods; K - Law and Economics > K1 - Basic Areas of Law; K - Law and Economics > K1 - Basic Areas of Law > K14 - Criminal Law; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East

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