Mexico's Crime Problem--Posner's Comment

I have been in Mexico only twice, in 1969 and in 2002, and the increased fear of crime in my second visit was palpable. On my first visit, I felt as safe as in the United States; on my second visit, although I did not feel quite as constrained as Becker describes his recent visit (maybe the crime situation has worsened in the last four year), there were constant reminders of the crime menace (such as the metal detectors at the entrance to the Four Seasons Hotel in Mexico City) and my hosts insisted on driving my wife and me everywhere. As Becker points out, despite the absence of good statistics there is no doubt that the Mexican crime rate is very high. Moreover, an increase in a crime rate greatly understates the increase in the demand for crime that generates the increased rate. The reason is that a rising crime rate induces defensive measures (alarm systems, private guards, gated communities, etc.) that, though they nominally reduce crime, actually just transform the costs of crime to crime victims into costs of crime avoidance by potential crime victims. The increase in the Mexican crime rate is mysterious. It is true that income inequality in Mexico has increased, in major part it seems because of liberal economic policies that, as in the United States, have increased the demand for skilled workers by subjecting employers to greater competition, both foreign and domestic. And increased income inequality, even when it is not associated with an increase in poverty, increases the gains from crime by increasing the number and wealth of people worth robbing, kidnapping, and defrauding. Yet it seems unlikely that the increase in income inequality in Mexico has been great enough to explain the increase in crime, especially since poverty in Mexico has declined dramatically since the mid-1990s, though the crime rate seems to have continued to grow--at least it has not declined. Becker rightly stresses the corruption and incompetence of the Mexican police as an important factor in the crime rate. This too is mysterious. Mexico is not a poor country by international standards. Its per capita GDP calculated on a purchasing power parity basis is slightly over $10,000, which places it in the upper third of the world's nations and ahead of such countries as Bulgaria, Romania, Turkey, and China, and within spitting distance of placid Costa Rica. Furthermore, because Mexico has a large population, that per capita figure translates into a total Gross Domestic Product of more than $750 billion. Mexico can afford an efficient police force in its capital! In 2003 Rudoph Giuliani was hired by Mexico City to advise on how to reduce the crime rate. He made 146 recommendations, based in part on his successful campaign to reduce crime in New York City when he had been mayor and in part on the obvious need to increase the salaries of Mexico City's police. Mexico City's police chief announced that he had accepted all of Giuliani's recommendations. But there was no implementation. I find that baffling. Although the underlying cause of Mexico's astronomical crime rate may be income inequality, it doesn't follow that reducing inequality is the the most efficient way to reduce the crime rate. It is a fallacy to think that the only sound solutions to social problems are those that remove the underlying causes of the problems. If crime can be repressed by improved law enforcement at lower cost than by attacking inequality, then improving law enforcement is the superior strategy. Efforts to reduce Mexican income inequality would probably either be totally ineffectual or stifle economic growth. Certainly the reform of law enforcement is the place to start. So the task for the think tanks is not to study the Mexican (or broader Latin American) crime problem as such; for the problem is obvious, and so is the solution (better law enforcement). What they should study is why the Mexican government and other Latin American governments are incapable of implementing the obvious solution.

Comments

[Brandon Erik Bertelsen]

"Although the underlying cause of Mexico's astronomical crime rate may be income inequality, it doesn't follow that reducing inequality is the the most efficient way to reduce the crime rate. It is a fallacy to think that the only sound solutions to social problems are those that remove the underlying causes of the problems. If crime can be repressed by improved law enforcement at lower cost than by attacking inequality, then improving law enforcement is the superior strategy. Efforts to reduce Mexican income inequality would probably either be totally ineffectual or stifle economic growth. Certainly the reform of law enforcement is the place to start.

Isn't is also a fallacy to ignore the long term spillover benefits of tackling the problem of income redistribution?

Sure, it would be a more expensive problem to tackle but to say that it would be less efficient is only a function of the time frame that you think of it in. It seems the argument is that doing what is most efficient (what takes less time) is better than doing what will create equitable and lasting change. Perhaps, tackling the income distribution problem would also help out with the productivity problem that you've touched on:

What they should study is why the Mexican government and other Latin American governments are incapable of implementing the obvious solution.

But then again, you have a point. If one can not implement an obvious, albeit short-term, solution. How could one ever implement a more advanced and long-term solution?

[Jason Le Vaillant-Coats]

The reason is that a rising crime rate induces defensive measures (alarm systems, private guards, gated communities, etc.) that, though they nominally reduce crime, actually just transform the costs of crime to crime victims into costs of crime avoidance by potential crime victims.
I suspect the costs of avoidance would be less than the costs of crime in the absence of avoidance. Even with a zillion implausible assumptions (perfect information and victim rationality, not to mention accepting the notion that the "cost" of crime is meaningfully reflected in expenditures to avoid it) the equality would only be true at the margin?
If crime can be repressed by improved law enforcement at lower cost than by attacking inequality, then improving law enforcement is the superior strategy. Efforts to reduce Mexican income inequality would probably either be totally ineffectual or stifle economic growth. Certainly the reform of law enforcement is the place to start.
There are other problems with inequality that have nothing to do with crime. There's no inherent reason why efforts to reduce inequality would be ineffectual or would stifle economic growth.

[robert]

My guess as to why Mexico's crime problem continues unabated? The Mexican government actually wants a high crime environment as an incentive for continued illegal immigration to the U.S. The advantages in having continued illegal immigration, i.e., remittances of billions of dollars from foreign workers back to Mexico, as well as the movement of an indigeous group that could otherwise foment an overthrow of the status quo, is far preferable to lower crime rates. Perhaps this explains why the Mexican government awarded Mayor Giuliani's firm a fat contract for crime reduction recommendations that were never implememted.

[robert]

(That last word was to read "implemented")

[Bernard Yomtov]

Isn't is also a fallacy to ignore the long term spillover benefits of tackling the problem of income redistribution?

Sure, it would be a more expensive problem to tackle ..

Maybe, but maybe not. Let's be sure to count all the costs of tougher law enforcement, including, for example, the lost productivity of prisoners who, under other policies, might not become criminals at all.

Also the assertion by Posner that

Efforts to reduce Mexican income inequality would probably either be totally ineffectual or stifle economic growth

is just that - an unsupported ideological assertion. By his own admission, Posner has made two visits to Mexico - thirty-plus years apart, and spent the second one, at least, in a protective bubble. It's more than a bit presumptuous for him to claim to understand Mexican social, political, and and economic conditions well enough to make such pronouncements.

[Charles]

As a South African I found this post very interesting. Our very high income inequality and crime rate makes our country very similar in nature to Mexico. In fact, if our newspapers are accurate, it puts us as one of the most unequal societies on earth as well as one of the most crime-ridden. Crime is one of our most dire problems.

For the readers who lean strongly towards a solution of increased income equality I have a question: how do you propose to correct the inequality, and with it the crime? As an young economist my experience have shown me that most measures dull incentives and are ineffectual or unfair. That is to say I largely agree with Posners comment. Rather than be hardline I'd like to hear possible solutions.

I'd also be interested to know whether links between crime and growth have been examined. It certainly seems to have an effect in South Africa, if only in the emigration of highly skilled individuals.

[N.E.Hatfield]

"Apocalypse Now", "Never get out of the boat!" Good advice then, just as good now. The first time I was overseas, I was told never go beyond the wall or fence alone. One of us didn't believe it and disappeared, I think he's still missing. I've given up trying to figure it out and solve others problems. Just get in, do the job, and get out as quickly as possible and never ever go beyond the fence or wall. ;)

[percy]

Having lived in the last 6 years for meaningful periods of time in Lima, Peru; Hyde Park, Chicago; Mexico City, Sao Paulo, Brazil, and Bonn, Germany maybe I can add something. Notice that I was born in Latin America, Spanish is my mother-tongue, and I definitely don’t look “gringo” (American).

Except for very few countries (Uruguay, Costa Rica, Chile), most of Latin American countries are either dangerous or very dangerous. Even for someone born in Latin America, the fear is the same whether you're in Caracas, Bogotá, Mexico, Lima, or Sao Paulo. The advice is the same everywhere: don't run any "unnecessary" risks (such as walking on the streets with your lap-top’s case, or sport a nice wrist watch), and don't trust the police.

During my two years at the business school in Chicago, I learned that INCENTIVES play a big role in almost every human activity. I can only think that there lies the answer for why the obvious solution is so hard to implement in this region. Corruption is deeply rooted, not only in the police but also in the government. Being this the situation, who's going to carry the reforms? who's going to implement them? Crime is without a doubt a lucrative activity for those involved in it, so the incentives are aligned rather against solving the problem.

As Becker points out, fighting crime is good politics, so in theory it should have a great political payback (= it must be a powerful incentive for politicians). However, the fact that nothing is done should be taken as evidence that the payback of being involved in crime and not fighting it is greater.

I agree that police in places like USA and Germany aren't corrupt because it doesn't make economic sense for them. The puzzle of why the Mexican police are not well paid even though the government has the resources is not as simple as it looks. LAT countries would need to raise salaries across the board to all public servants (teachers, judges, etc) to avoid political conflict. I guess the bill would be too high, and it’d subsequently create economic chaos.

Countries –like Chile- that succeeded (for LAT standards) at solving this problem have managed to create sustainable economic development and making sure an ever greater percentage of its population has attractive opportunities to be employed. Another example that apparently supports this point –as surprising as it might seem, is Colombia. Apparently it’s rapidly becoming a safer country (it’s now definitively safer than 10 and 5 years ago), and it has already ceded its position as “capital of kidnapping in Latin America” to Mexico City (I understand that Sao Paulo is now the second). It seems that this dramatic change has been driven by strong political determination, and an improved economic situation. In other words, realignment of incentives.

[Xavier]

I totally agree with Posner's comment. I'm just wondering whether he and Becker are going to tackle the "torture bill" and more broadly, the use of torture against terrorists. I'm sure it would be extremely interesting.

[Bernard Yomtov]

Percy,

Your point about needing to raise salaries for all public employees is very interesting.

I'm not convinced that "reform law enforcement" and "reduce inequality" are competing strategies, rather than complementary ones.

Posner's implicit assumption seems to be that Mexican inequality arises as a natural consequence of economic activity. Is it possible instead that a major source of inequality is, in fact, government corruption that heavily rewards some segments of the population for their political connections, bribery, and the like? If so, then stricter law enforcement ought to include an attack on these practices as well, which might well reduce inequality, and resentment.

Of course, if my hypothesis is correct, then the powers that be are quite likely to oppose stricter law enforcement. After all, they are well-protected, and can probably afford private security as well. Why give some nosy prosecutor the opportunity to look into what's going on in the government.

[Justin]

"If crime can be repressed by improved law enforcement at lower cost than by attacking inequality, then improving law enforcement is the superior strategy."

This sounds like a wonderful strategy for pushing a nation towards a revolution at worst and a short term fix at best.

The human costs must be factored into any cost/benefit analysis.

[Chairman Mao]

Judge P,

Bulgaria, Romania, Turkey, and China are different from Mexico in that they do not border the U.S. Being poor is a relative term and when a country borders one of the largest and most prosperous economies in the world it will affect how people react to their relative poverty especially with restricted borders and the inability of Mexico (or any other Latin American country) to exert significant political and/or military power due to U.S. hegemony. The U.S. shadow looms over Mexican heads; they feel that they can never be equal to America. When people feel apathetic, crime will rise.

[Douglass Carmichael]

Is not the purpose of government to enhance the quality of life, or at east its enabelling conditions, for everyone? That a system creates such inequality hints at system failure. What of compassion for those whose life circumstances are deteriorating under a particular systemic situation, and end up as "criminals" in such a system?

[Redmund Sum]

Income inequality as a "problem" cannot be solved directly except by totalitarian means. Income equality is not a true good, as it is a goal set against the natural differences in people's abilities. That is why those who intent on "changing income inequality" by crude means (quotas come to mind) invariably end up bring disastrous results to society. Governments should strive to make economic opportunities available to all and let people compete on equal terms. Under such a system, even the poorest in a society will find it more advantageous to do work rather than to do crime.

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