Speaker
Description
Greater openness to trade can create benefits through lower prices, greater product diversity, and higher export earnings. But additional exposure to import competition may reduce income and employment in affected sectors. These negative consequences can increase crime by altering the net benefits of engaging in illicit activities. We analyze the impact of the U.S.-Colombia Free Trade Agreement on the growth of crime in Colombia from 2012 to 2017. Using panel data from 887 Colombian municipalities and a shift-share instrumental variables approach, we find that increased exposure to competition in staple crops led to more home burglaries and robberies of individuals, but fewer business robberies. Crime impacts were con-centrated in the Andes and non-coca-producing regions. Our results suggest that trade liberalization should be accompanied by policies that mitigate negative effects on exposed sectors.
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