Scholars have often argued that crime deters growth, but the empirical literature assessing such effect is scarce. By exploiting cross-municipality income and crime data for Mexico-a country that experienced a high increase in crime rates over the past decade-this study circumvents two of the...

The relationship between income inequality and crime has attracted the interest of many researchers, but little convincing evidence exists on the causal effect of inequality on crime in developing countries. This paper estimates this effect in a unique context: Mexico's Drug War. The analysis...

Scholars have often argued that crime hinders growth, but the empirical literature assessing such an effect is scarce. By exploiting cross-municipal income and crime data for Mexico, in this study we find evidence indicating that drug-related crime indeed deters growth.