Good policy can lower violent crime: Evidence from a cross-national panel of homicide rates, 1980-97

This article provides empirical evidence that good political governance and good economic policies can lower homicide rates. Therefore, violent crime is not simply determined by modernization, population characteristics, and cultural factors. This result follows from rigorous econometric testing based on a cross-national panel of homicide data from up to 117 countries over the period 1980-97. Contrary to most existing studies, which have applied ordinary least squares on data drawn from one time period only, this analysis uses a fixed-effects estimator with fully robust standard errors. A fixed-effects estimator elegantly controls for time-invariant determinants, such as cultural factors, and allows the pooling of homicide data from otherwise incompatible sources. This is complemented by random-effects estimation in sensitivity analysis. The results suggest that economic growth, higher income levels, respect for human rights, and the abolition of the death penalty are all associated with lower homicide rates. The same is true for democracy at high levels of democracy. The transition from autocracy to democracy is likely to be accompanied by a rising homicide rate, however, until full democracy has been reached. Results also indicate that policies aimed at improving equity have no effect on violent crime. In particular, there is evidence that the positive effect of income inequality on homicide rates found in many studies might be spurious. The results reported here arc strikingly similar to those found for the causes of civil war.