Assessing the Impact of Crime on Economic Performance: The Case of Central America

Abstract

Crime is obviously a menace to economic growth and progress, but to acutely understand the enormity of its impact on economic performance for effective policy action, requires a credible means of measurement. Given the crime notoriety of the most of Central America and the struggling state of their economies, this article attempts to discern from econometric evaluation and analyses, the calculable economic impact of crime on the region’s economic progress. Hence, for this purpose, the article employed the economics of crime monitoring model (ECM-Model), a new economic instrument that could appropriately evaluate the impact of crime on economic performance. From analyses of results, we find the model to be credible and useful following its provision of a much more accurate degree to which crime affects economic performance in Central America, which we find critical to guide policy measures.

Keywords: Crime, ECM-Model, economic performance, Central America

JEL Classification: Y20