Economic Development and Crime

Bluebook Citations:

Jesse McKinley, “Where Marines are Called ‘Intruders’ and Recruiting Office is Unwelcome,” The New York Times (Feb. 12, 2008), available at http://www.nytimes.com/2008/02/12/us/12berkeley.html?scp=1&sq=berkeley&st=nyt (last visited Feb. 13, 2008).

Gary Becker, “Crime and Economic Development,” The Becker-Posner Blog: A Blog by Gary Becker and Richard Posner (May 6, 2007), available at http://www.becker-posner-blog.com/archives/2007/05/crime_and_econo.html (last visited Feb. 13, 2008).

David R. Bowes, “Crime as an Obstacle to Revitalization: A Two-Stage Model of the Simultaneous Relationship Between Retail Development and Crime,” Economic Development Quarterly (2007), available at http://edq.sagepub.com/cgi/reprint/21/1/79 (last visited Feb. 13, 2008).

Summary:

I have two brief capsule summaries of articles I came across this week that I thought would be helpful for us once we begin writing: the first is a New York Times article, on the recent controversy over the Berkeley City Council’s treatment of its marine recruitment office, and the second two are treatments of the relationship between crime and economic development.

1. Berkeley City Council v. Marine Recruitment Office

This article notes that the Berkeley City Council expressed its community’s values recently by undertaking two actions in relation to the Marine recruitment office downtown: first, it issued a proclamation that the Marines were “uninvited and unwelcome intruders,” and second, it set aside a parking spot outside of the Marine recruitment station one day a week for Code Pink, an antiwar activist organization. State and federal politicians threatened to withdraw state and federal funding from the City of Berkeley for programs such as school lunches and transportation. On Tues., Feb. 12, the City of Berkeley backed off of its proclamation against the Marines in order to appease those who objected to the City Council’s actions.

Although this article is, of course, not directly related to our project in the workshop in terms of its subject matter, I think it may be useful for reflecting several key details. First, the Berkeley City Council operates to express and represent a particular left-wing political sentiment, and that it is that sentiment in part that seems to drive its operation of day-to-day operations of the city such as the allocation of parking spots. Second, it suggests that in the face of a threat to its financial livelihood, the Berkeley City Council is willing to capitulate and bow to economic pressure. This seems particularly interesting given that development plans may pit some Berkeley values against potential economic growth for the city.

2. Crime and Economic Development

I also went searching for information comparing crime rates with the rates of business and economic development in cities and counties. It seems intuitive to me that rising crime rates and rising rates of homelessness would correspondingly inhibit the growth of local businesses and the local economy in general. Businesses might have higher up-front overhead in ensuring the security of the company, and high crime rates might prevent visitors from coming to retail shops. In addition, businesses would need to factor in the financial risk of entering a neighborhood that may contain other failing businesses upon which a store hopes to rely for shared customers. (The counterargument seems to me to be that it is the poor local economy that triggers the high crime rates, depriving citizens of jobs, and thus that as soon as the economy is stimulated the crime rates will disappear, and not before.)

To that end, I came across an interesting posting by Prof. Becker at The Becker-Posner Blog on Crime & Economic Development. Becker writes that “[h]igh crime rates directly raise the cost of doing business,” both because of the expense of “employ[ing] hundreds of security personnel” to protect “families and high-level employees,” and because people tend to drive in the face of high crime rates so that they can protect themselves from being vulnerable on foot. As a result, business increase from pedestrian access is correspondingly reduced.

Without writing at length about the economic theories that explain the relationship between crime rates and economic development, I did locate one fuller theoretical and empirical study by David Bowes which bears out Prof. Becker’s theory to a fair degree. Essentially Bowes concludes that retail economic development downtown is inhibited by violent crimes – and thus that development strategies hinge upon reduction of violent crimes:

“[R]etail development attracts primarily property crime but is repelled by violent crime. Thus, what may be discouraging retail development is not higher costs associated with loss from theft or increased insurance rates but loss of potential customers who are reluctant to go into areas characterized by high concentrations of violent crime. The fear of crime-ridden neighborhoods repels potential customers and, therefore, makes the area unattractive for retail development. Public policy strategies meant to encourage retail development in a particular part of the city such as downtown need to include efforts to reduce crime. Without sufficient efforts in crime reduction, other development strategies may not work as effectively, limiting the pace and extent of development. Programs intended to reduce crime may bring customers back to central city retail locations. Current examples of these types of public policy initiatives include video cameras posted in high-crime areas, which are intended to help deter crime and improve the public’s perceptions of an area’s safety.” (p. 88)