Paying for Crime: A Review of the Relationships between Insecurity and Development in Mexico and Central America

Crime and insecurity are undermining economic and social prosperity in Mexico and Central America by diverting public and private resources away from productive uses, and eroding public trust in government institutions. Worldwide, crime and homicide rates are correlated with income inequality, unemployment, and lack of progress in social development. In this region, the situation is directly attributable to the growing prominence of drug-trafficking organizations (DTOs), but has also been fueled by institutional weaknesses, lack of alternative economic opportunities for young people, and a general culture of impunity. Insecurity has many negative social and political implications that can erode a society’s social capital. Polls indicate that around 70 percent of Mexicans and Central Americans consider crime to be “very much” a problem in their society. Government officials or institutions that are perceived as inept or colluding with organized crime also contribute to the larger problem. Given the consequences of ignoring this issue, the governments of the region must work to devise and implement policies that address the links between crime rates and development, citizens' lack of trust in institutions, and the high economic toll of insecurity overall.