nep-lam New Economics Papers
on Central and South America
Issue of 2022‒01‒31
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Unbundling the Relationship between Economic Shocks and Crime By Ferraz, Eduardo; Soares, Rodrigo R.; Vargas, Juan
  2. Domestic migration and family formation and dissolution trajectories in Latin America and the Caribbean, 1950-2000 By Andrés F. Castro Torres
  3. Colombia: Democratic but Violent? By Fergusson, L; Vargas, J. F
  4. Beyond the Fetish of Economic Growth: Measuring Sustainable Economic Welfare in Chile By Simon Accorsi; Ramon E. Lopez; Maite Azua; Valentina Vergara

  1. By: Ferraz, Eduardo (Universidad del Rosario); Soares, Rodrigo R. (Insper, São Paulo); Vargas, Juan (Rosario University)
    Abstract: Intuitively, by increasing the opportunity cost of engaging in criminal activities, positive economic shocks should reduce crime. However, the empirical evidence on the relationship between economic shocks and criminal behavior is at best ambiguous. This may be because certain types of shocks make the booty more attractive and thus constitute an incentive to predate. Beyond this basic distinction between an "opportunity cost" and a "rapacity" mechanism that may mediate the effect of economic shocks on crime, this chapter proposes a simple conceptual framework to understand this nuanced relationship. We posit that the way that economic shocks shape criminal behavior depends on three factors: i) whether the shock comes from a legal or an illegal source, ii) the extent to which the shock source is more or less lootable, and iii) the presence of contextual factors that shape the relative importance of the opportunity cost and the rapacity effect, such as the underlying level of economic inequality, the institutional strength and law enforcement capacity of the state, and whether there are instances of accelerated and hazardous economic growth that likely create social disorganization and institutional unbalance. We use this taxonomy to review the seemingly inconclusive empirical evidence, and close by highlighting current persisting puzzles as well as areas where additional research on the relationship between economic shocks and crime would be welcome.
    Keywords: economic shocks, crime, opportunity cost, rapacity, illegal activity, inequality, institutions, social disorganization
    JEL: K42 J30 D74 F16
    Date: 2021–12
  2. By: Andrés F. Castro Torres (Max Planck Institute for Demographic Research, Rostock, Germany)
    JEL: J1 Z0
    Date: 2022
  3. By: Fergusson, L; Vargas, J. F
    Abstract: Colombia is a Latin American outlier in that it has traditionally been a very violent country, yet at the same time remarkably democratic. This chapter explores Colombia’s puzzle from a political economy perspective, shedding light on the broader relationship between democracy and violence. The chapter studies some of the most important democratization reforms since Colombia’s independence 200 years ago. It argues that the reforms often failed to curb violence and sometimes even actively, though perhaps unintendedly, exacerbated violent political strife. Democratic reforms were unable to set the ground for genuine power-sharing. They were often implemented amidst a weak institutional environment that allowed powerful elites, the reforms’ ex-ante political losers, to capture the State and offset the benefits of the reforms for the broader society. We conclude by highlighting the implications of the argument for other countries facing democratic reforms, as well as for Colombia’s current peace-building efforts.
    Keywords: Colombia, democracy, democratization, conflict, violence, power-sharing, political institutions
    Date: 2022–01–14
  4. By: Simon Accorsi; Ramon E. Lopez; Maite Azua; Valentina Vergara
    Abstract: This article presents a calculation of the Index of Sustainable Economic Welfare (ISEW) for the Chilean case (2000-2018). Because of their solid theoretical foundations, we argue that the ISEW is a much more correct and accurate measure of development than Gross Domestic Product (GDP). In the Chilean case, the key explanatory variable in well-being is the economic rent associated with the depletion of its non-renewable natural resources, but we also highlight the need to make visible the Unpaid Domestic and Care Work (UDCW), which represents the biggest sector of the Chilean economy, when its properly measure. We emphasize the need for a more comprehensive and broader view of the development process and its meaning, according to the guidelines that the ISEW can deliver and its foundations. We finally pointed out to the need to systematize and institutionalize the construction of this indicator in order to make it understandable and legitimate for citizens. In this way, the ISEW can serve as input for the discussion about the direction of our development process.

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