Academic journal article Journal of Economic Cooperation & Development

Economics, Law Enforcement and Crime Connection [A Longitudinal Data Approach]

Academic journal article Journal of Economic Cooperation & Development

Economics, Law Enforcement and Crime Connection [A Longitudinal Data Approach]

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1. Introduction

There is a growing concern about higher crime rate in different areas of Pakistan which is a threatening situation regarding economic and political scenario of Pakistan. It needs a reasonable attention of all concerning authorities to take feasible actions related to minimize the illicit behavior of the natives of the country. Becker (1968) in his influential work has called criminals and law enforcement agencies as rational one which is a motivation for economists to identify various economic reasons behind high crime rate of some society.

Economics of Crime is a newly emerging discipline in Pakistan and few available studies comprises of time series data of country level seems less sufficient to explain the deep insights of nature of activity (crime). According to best of our knowledge most of the studies in this discipline has less concentrated on isolation of various socio-economic, demographic and law enforcement variables at districts and divisional level, therefore, understating or overstating their effect on crime rate4. All available studies ignored the possible heterogeneity among different districts and divisions of Pakistan as these studies only focused country level time series analysis [Jabbar, M. S., & Mohsin, H. M. (2014); Kennedy et al (2008)]. So space is available in literature to extend the crime and economics analysis on districts and divisions level in Pakistan.

Furthermore, direction5 (sign) of police strength in most of the empirical studies of Economics of Crime, Law and Economics and Criminology creates ambiguity either increase in police strength has deterrence effect on crime rate or not. This study highlighted that deterrence effect of police strength on crime rate is conditional upon its decision of allocation by crime prevention authorities based on some specific characteristics of different areas or according to nature or severity of crime. For this purpose study focused on using a balance panel data set for the year (2008-2012) of thirty five (35) districts of Punjab [Pakistan] keeping in mind the regional disparity and use of suitable econometric technique to get more reliable empirical findings. Study has used an interaction term with respect to economic activity and has introduced regional dummy models to test either empirical findings of current study supports the above stated hypothesis or not?

It is of note that current study is using law enforcement variables along with socio-economic variables to avoid expected omitted variable bias in economic equation of crime. Moreover care has also been taken regarding use of some more reliable econometric technique to get empirical findings of this study.

Letter half of study is arranged as follow; Section 2 portrays literature review related to our work. Section 3 explains some economic theory of crime model that are used for empirical estimations. Section 4 portrays empirical results along with interpretation and discussion on empirical findings. Section 5 concludes our paper and some policy implications of current study have been suggested on the basis of our results.

2. Literature Review

History of illegitimate activities started with the history of human beings and it remained a subject of interest in every society. However economists re-concentrated on crime and economics discipline with modem ideas and techniques after Becker (1968) who concentrated on modeling the criminal behavior to show rationality of criminals also an optimal level of law enforcement by crime prevention authorities. He preferred private law enforcement to public law enforcement by arguing that it may lead to have a less burden on tax payers. He led the theoretical foundations of modern school of thought of crime and economics' discipline and after that Fleisher (1966), Tullock (1967), Rottenberg (1968), Stiggler (1974), Landes and Posners (1974) have also done seminal work in this discipline [Issac Ehlrich (1996)]. …

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