Crime and punishment: the economic burden of impunity

• Published in: The European physical journal. B, Condensed matter physics Vol. 68; no. 1; pp. 133 - 144
• Main Authors: Gordon, M. B., Iglesias, J. R., Semeshenko, V., Nadal, J. P.
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer-Verlag 01.03.2009; EDP Sciences
• Subjects: Adaptation and Self-Organizing Systems; Complex Systems; Condensed Matter Physics; Economics and Finance; Exact sciences and technology; Fluid- and Aerodynamics; Humanities and Social Sciences; Interdisciplinary Physics; Mathematical methods in physics; Nonlinear Sciences; Physics; Physics and Astronomy; Physics and Society; Probability theory, stochastic processes, and statistics; Solid State Physics; 89.65.-s Social and economic systems; 89.65.Ef Social organizations; anthropology; 89.65.Gh Economics; econophysics, financial markets, business and management; Punishment; Probability; Mathematical models; Cost; Crime
• ISSN: 1434-6028; 1434-6036
• DOI: 10.1140/epjb/e2009-00066-x

Crime is an economically relevant activity. It may represent a mechanism of wealth distribution but also a social and economic burden because of the interference with regular legal activities and the cost of the law enforcement system. Sometimes it may be less costly for the society to allow for some level of criminality. However, a drawback of such a policy is that it may lead to a high increase of criminal activity, that may become hard to reduce later on. Here we investigate the level of law enforcement required to keep crime within acceptable limits. A sharp phase transition is observed as a function of the probability of punishment. We also analyze other consequences of criminality as the growth of the economy, the inequality in the wealth distribution (the Gini coefficient) and other relevant quantities under different scenarios of criminal activity and probabilities of apprehension.