July 27, 2015 Print

Photo Credit: Kenny Louie

Violent crime is a terrifying violation of person and property, with devastating effects that ripple throughout the lives of the victims. The aftermath isn’t confined to the direct targets of criminal activity, though, or their family and friends. It also spreads throughout the local economy, making it more difficult and costly to do business, raising the prices of goods and services, and hitting the pocketbooks of hardworking people everywhere. That’s why Uruguay-based Atlas Network partner Centro de Economía, Sociedad y Empresa (ESE) is tackling the issue as one of the 16 recipients of Atlas Network’s 2015 Leveraging Indices for Free Enterprise Policy Reform grant opportunity.

The already-high level of violent crime in Uruguay has steadily climbed in recent years. The U.S. Department of State reported in its 2015 crime and safety report that, in addition to routine theft in tourist areas, Uruguayan capital Montevideo has seen “an increase in violent crime to include home-invasion robberies, restaurant take-overs, and armed robberies of businesses and other locations known to have cash on hand.” The report notes that these thefts often involve violence if victims resist.

“Increasing crime rates is the main public concern in Uruguay,” Centro ESE said. “According to opinion polls, nine out of 10 Uruguayans are unsatisfied with public security levels. International victimization surveys suggest that one out of three Uruguayans feel insecure in the streets of their neighborhoods and close to 20 percent were victims of criminal acts. Both figures place Uruguay in the average level of Latin America, the region with the highest perceived insecurity in the world.”

Firms in Uruguay already have international competitiveness problems because of real exchange rate appreciation, lags in physical infrastructure, and underdeveloped human capital formation, Centro ESE explained, so increases in the business cost of crime are a significant threat to an already struggling economy. The organization aims to quantify the cost of crime in various Uruguayan industries by running the first representative survey of the cost of crime for businesses there by interviewing leaders and other decision makers in Uruguay’s business community.

Crime also affects property values in the real estate market, Centro ESE noted, so it also plans to develop quarterly surveys of property crime. This will allow the organization to track property crime victimization at a higher frequency than the data currently available from annual surveys conducted by international institutions. A recent survey conducted by the World Bank in Latin America confirms that Uruguay suffers relatively less from property crime than its regional neighbors, but Latin America is still the most violent region in the word, so data about this issue remains particularly useful.

Centro ESE also plans to produce maps that track incidences of crime in Montevideo, Punta del Este, and Colonia, using its access to Police Department of Montevideo’s crime database. Its dataset includes more than 1 million offenses in Montevideo ranging from January 2002 to November 2014, and includes information about the nature of each criminal incident, including the date, and exact hour. Beginning in 2006 the database also began including geo-referenced location data on each reported crime incident — not only in Montevideo, but also in Punta del Este and Colonia, the places with heaviest foreign investment in Uruguayan real estate.

In order to generate change, Centro ESE will use the data it collects as the basis of high-quality research papers to be published in international academic journals, and to be presented to Uruguay’s Ministry of the Interior. These will join Centro ESE’s many existing pieces of research on the economics of crime, which have already had a strong impact in Uruguay media.

Centro ESE will measure its results over time through Uruguay’s ranking in the “Business Costs of Crime” category of the Fraser Institute’s Economic Freedom of the World index. The data for this portion of the Fraser Institute’s index is taken from the World Economic Forum’s Global Competitiveness Report, specifically the question: “To what extent does the incidence of crime and violence impose costs on businesses in your country? (1 = to a great extent; 7 = not at all).” Uruguay currently ranks at 100 among 144 countries throughout the world for that question in the Global Competitiveness Report.

Atlas Network established its Leveraging Indices for Free Enterprise Policy Reform grant to help partner think tanks achieve a tangible, real-world impact, by measuring the outcomes and results of their work against reputable international rankings or indices. Generously supported by the John Templeton Foundation, this project provides grants to Atlas Network partners to conduct research, advocacy campaigns, and media campaigns to promote policy reforms that measurably move the needle in a specific prominent ranking or index.

Read “First-day criminal recidivism.”

Read “The juvenile crime dilemma.”

Read “Análisis económico de la delincuencia en Uruguay.” (PDF in Spanish.)

Read “Las tres incapacidades.” (PDF in Spanish.)

Read “World Cup football reduces crime in Uruguay by 15%.”

Read the Fraser Institute’s “Economic Freedom of the World 2014 Annual Report.”

Read “Atlas Network partners selected for Leveraging Indices grant.”