The Economic Cost of Crime in Latin America: A Budgetary Strain

A report by the Inter-American Development Bank reveals that violence and crime consume 3.5% of Latin America and the Caribbean's economic output. The costs, amounting to almost 80% of public budgets for education, significantly hamper regional growth, increase inequality, and hinder investment opportunities.

Violence and crime siphon off nearly 3.5% of Latin America and the Caribbean's economic output, severely affecting funds earmarked for education and vulnerable communities, according to a recent Inter-American Development Bank (IDB) report.

Beyond the tragic human toll, the financial burden of crime equates to nearly 80% of public budgets for education in the region, double the expenditure on social assistance, and 12 times the budget dedicated to research and development, data from 2022 reveals.

The IDB study identifies direct crime costs through loss of human capital, business expenditures on crime mitigation, and public spending on prevention and justice. Comparatively, Europe's costs are 42% lower, suggesting LAC could save significantly if conditions mirrored those of some European counterparts.

(With inputs from agencies.)