How Crime can Affect Economic Performance through the Application of an ECM-Model: the Case of Guatemala

Crime has a potentially large impact on economic growth but measuring their economic impact is subject to a great deal of uncertainty. The central objective of this paper is to set forth a model – the economics of crime monitoring model (ECM-Model) – to evaluate the impact of crime on economic performance. The model is based on five basic indicators – (i) the total crime frequency rate (β); (ii) the national crime vulnerability rate (μT); (iii) the crime devastation magnitude rate (λ); (iv) the economic desgrowth rate (δ); (v) and the crime vulnerability surface (VV-Surface). In addition, this research applies the ECM-Model in the case of Guatemala to evaluate how crime affects economic performance in a small developing country.