We empirically investigate the role of fiscal policies on criminal activity using a sample of 25 EU countries over the period 2000–2013. Our analysis indicates that tight fiscal policies appear to have a positive effect on crime. This effect becomes stronger when property (non-violent) crime rates are considered. Further, the presence of high levels of shadow economy in a country provides a very strong mitigating factor on the adverse effect of public policies on crime. The initially strong link between tight fiscal policy and non-violent crime weakens significantly in the presence of undocumented economic activities which compensate for the lack of formal economic opportunities.
|Journal||Global Economy Journal|
|Publication status||Published - 2 Oct 2020|
- fiscal policy
- shadow economy
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)