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Full-Text Articles in Social and Behavioral Sciences
The Role Of Trade In Amplifying Crime, Catherine De Fontenay
The Role Of Trade In Amplifying Crime, Catherine De Fontenay
Catherine de Fontenay
There is enormous variation in crime rates across countries, greater than differences in income or inequality would suggest. There are currently no explanations for this magnitude of variation. We show that much of this variation can be explained using trade flows. We add a “Crime” sector to a traditional two-sector two-input Heckscher-Ohlin model. Under autarky, countries have the same crime rate, but free trade is found to increase crime in the resource-rich country and to reduce crime in the labor-rich country by an equal amount. The negative externality from increased crime can be strong enough to cancel out the gains …
The Relocation Of Crime, Catherine C. De Fontenay
The Relocation Of Crime, Catherine C. De Fontenay
Catherine de Fontenay
We add a new sector called Crime to a traditional two-sector two-input Heckscher-Ohlin model of trade between countries. Trade is found to increase crime in the resource-rich country and to reduce crime in the resource-poor country by an equal amount. The negative externality from increased crime can be strong enough to cancel out the gains from trade for the resource-rich country. The paper also explores the impact of aid, capital flows, and migration on crime rates, and how crime shapes the degree of specialization in each economy.