Crime, transitory poverty, and isolation: Evidence from Madagascar

The effect of transitory poverty on crime was examined by taking advantage of an unusual sequence of events in Madagascar. Data for this study was collected in the middle of a serious and volatile political crisis that led to a blockade of the heartland of the country. Disruption to road transport and economic activities was massive, resulting to dramatic increase in poverty. Because the political crisis was resolved with little bloodshed, there was no refugee crisis, and the damage is nearly exclusively economic. This sequence of events provided a unique opportunity of assessing the effect of transitory poverty on crime while keeping other crime determinants basically unchanged. Fixed-effect regressions were estimated for a least squares and a Poisson model. It was found that certain forms of crime increase with transitory poverty. Most conclusive results were for crop theft, where transitory poverty was shown to have a significant effect in all regressions. This result is consistent with Fafchamps and Minten (2005), who reported that 23% of Malagasy farmers refrain from expanding upland cultivation away from the village for fear of insecurity. Similar evidence was obtained regarding burglaries, but the evidence was not robust because of the small size of the sample and the relatively low frequency of burglaries in the data. In contrast, no positive association between transitory poverty and other forms of crime such as homicides and cattle theft was observed. In agreement with Fafchamps and Moster (2003), it was found that locations that became more isolated incurred more crime.