The Relationship between Economic Freedom and Homicide

Abstract

Does economic freedom lead to more or less conflict? Numerous authors argue that markets create conflict, whereas many advocates of economic freedom from Adam Smith to Milton Friedman argued the opposite. This topic has not yet been investigated empirically. This article examines the various ideas regarding why economic freedom may reduce conflict and why government intervention might increase it. Then the article looks at cross-national data to determine whether measures of markets and conflict are correlated. It finds that in a cross section of countries, measures of economic freedom are significantly and negatively correlated with homicide rates. These results hold under various tests for robustness. Increases in economic freedom do appear to be associated with decreases in homicide rates.

Keywords: international crime, determinants of crime

JEL Classification: C21, H10, K1, N40