Crime and Erosion of Trust: Evidence for Latin America

Abstract

Crime has tangible economic costs. It also has less understood and likely sizable intangible costs. In particular, widespread crime has the potential to weaken trust between citizens and institutions, undermine government reform efforts, and become an obstacle to development. Yet, the impact of crime on trust remains relatively unexplored in the literature. This paper analyzes the potential interrelationship between individual victimization and several measures of trust, including trust in formal public institutions and trust in informal private networks. It is based on a representative sample of individuals in 19 countries in Latin America. The empirical strategy is intended to mitigate overt biases and assess sensitivity to hidden biases. The results show that victimization has a substantial negative effect on trust in the local police but no robust effect on informal institutions. Governments may henceforth need to redouble efforts to reduce victimization and the resulting erosion of trust in public institutions.