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Economic Cost of Crime in Chile

NCJ Number
Global Crime Volume: 8 Issue: 4 Dated: November 2007 Pages: 287-310
Mauricio Olavarria-Gambi
Date Published
November 2007
24 pages
The study examined the economic cost of crime in Chile.
Estimates of crime in Chile suggest: that the incidences of victimization in Chile are higher than other developed countries, that the most frequent crimes in Chile are of comparatively low economic impact, and that Chile’s government spending on citizens’ security is considerably lower than that of the United States and some European countries. Data indicate that the economic cost of crime is equivalent to 2.06 percent of Chile’s GDP. Hard crime is the source of the greatest cost in Chile, representing 43.8 percent of the total cost of crime; consequential costs of crime which relates to the most direct losses produced by crimes against people and property represented 68 percent of the total cost of crime. Government spending against all types of crimes analyzed (murder, robbery, larceny, theft, burglary, wounding, rape and sexual assaults, domestic violence, and economic felonies such as fraud and forgery) represented around one-third of the costs produced by hard crime and suggest that a policy intervention might lower crime levels more effectively. To reduce crime levels and the cost it produces, there is a tendency to stress interventions based on the deterrence effect such as stronger laws, harsher penalties, more effective courts, and a more efficient police force. Arresting more criminals and keeping them in jail longer would effect some crime reduction and might even deter criminal behavior. However, given the multiplicity of causes of criminal behavior, the reduction of the cost it produces cannot be addressed by a single policy, but rather a policy package that both considers the effect of the economic policy, and includes efficient interventions to deter crime through persistent social policy. The data was collected from Chile’s Ministry of the Interior victimization survey. Tables, appendix