Diego Aboal, Bibiana Lanzilotta, Magdalena Dominguez, Maren Vairo
This paper provides evidence on the costs imposed by crime and violence in five Latin American countries: Chile, Costa Rica, Honduras, Paraguay and Uruguay. Crime and violence stand out as one of the major social challenges to be dealt with in Latin America. However, the incidence of crime (and thus its social and economic impact) varies among countries. Based on a common theoretical framework across all five countries, we use a costs-accounting methodology and find that the cost of criminality varies from a striking 10.5 % of GDP in Honduras to a moderate 2.5 % in Costa Rica. Also, by quantifying the different components of the cost equation separately, we provide insight on which felonies are more costly and which agents are burdened most heavily by these costs.