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More money, more crime: A theory on rising crime in Latin America

Prof. Marcelo Bergman, Universidad Nacional de Tres de Febrero (UNTREF), Argentina

In this lecture and his new book, Professor Bergman addresses the rapid rise of crime and violence in Latin America over the last decades, and offers an explanation to a striking paradox: In the midst of poverty reduction, economic growth, and democratization, crime rose in the eighteen countries of the region. Drawing from large data sets collected specifically for this project, he argues that crime has risen because it has become a profitable industry, and because weak states and outdated criminal justice systems have been unable to withstand the challenge posed by these new criminal enterprises. Prosperity has actually enhanced consumer demand for illicit goods fueling the growth of secondary and illegal markets, including those of stolen goods and narcotics which offer income opportunities for millions of youngsters willing to risk arrest and even their own lives. While some countries have experienced moderate increases in criminality, others have seen catastrophic rates of violence resulting in two types of stable equilibria: Low and high crime countries. He explains why these different equilibria have developed in the region, and discusses their undesired outcomes: serious predatory crime diversification, consolidation of organized crime, ineffective justice reforms, weak policing, and overcrowded prisons.

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