Opinion: The Economics of Crime

Should I jack you up on the corner and take all your money and jewellery? Should I break into your apartment or house while you aren’t there and go "shopping?" Or should I rob my employer of all his assets and funds because he has misguidedly placed trust in me?

What is there realistically to prevent me from committing all of the above crimes? Do the gains from committing a crime far outweigh its costs? Would the chance of being detected or even convicted make me think twice before following through with the act? If yes, up to what magnitude of detection and conviction would stop and make me think before I go ahead with the crime?

Crime is a rational decision. Individuals weigh the pros and cons of everything they do in life: Should I get this dress? Do I really need this car? Could I afford to skip work or school today? Crime likewise is no different. A criminal looks at his options; he weighs the benefits versus the costs and depending on where the scales lean towards, he acts accordingly.

The harsh reality is that we can never escape crime. As long as there is an opportunity to commit crime, crime will exist. We do not live in a utopian society where all of humankind is altruistic and benevolently looks after one another without expecting a return. Man is first selfish and irrational. Where we need to focus our attention is how we can attain a socially optimum level of crime. This socially optimum level of crime is a reality where the benefit of committing one more unit crime is equal to the cost of one more unit of crime. In such a scenario, an individual would not be motivated to engage in any additional crime, other than what presently exists, because there is no incentive to do such. This approach to treating with crime is dubbed the “Economic Approach.”

How does this Economic Approach hold up in sweet Trinidad and Tobago? Can we apply all the previously mentioned rationale to our case here at home? Or does crime in Trinidad and Tobago have a personality and motive of its own volition?

The Facts

The ugly truth is this: Like all other places in the world, crime is an organised, profitable business in Trinidad and Tobago. Some may argue that not all crime seeks to make a monetary gain, such as hate crimes, rape, crimes of passions etc., but for simplicity, we will focus mainly on those driven for economic gain. Crime is no longer just a social issue that needs to be faced on a national front. It has now evolved into a transnational, macro-economic and macro- sociological phenomenon that afflicts all and sundry in the international arena. Due to globalisation, crime has galloped away from many states. The ideas of borders and geographical distinctions are quickly disappearing; transmission of information is almost seamless and instantaneous and resources are no longer static but rather fluid and easily accessible.

Crime is said to be one of the biggest winners in the face of globalisation. It is believed that it contributes to trillions of dollars to the world economy annually. According to the United Nations Office on Drugs and Crime (UNODC), human trafficking contributes “a profit of USD $3 billion, with 140,000 victims being exploited in Europe alone.”  The UNODC report of 2010 adds that “piracy has…doubled over the past year resulting in an annual income of US $100 million.” Some experts have estimated that organised crime contributes “around US$ 870 billion a year” while others estimate that it contributes anywhere between “1.5 per cent of global GDP, or 7 per cent of the world's exports of merchandise”. What do these figures really mean though? These massive illicit profits of organised crime represent more than six times the official development aid and assistance meted out by international organisations to the world!

Crime has broadened its arsenal to encompass narcotics, arms and ammunition, cyber-crime, human trafficking, money laundering and terrorist financing and counterfeiting. “Criminals are the first-movers wherever there are opportunities to exploit” comments Antonio Maria Costa, former  Executive Director of UNODC and Director-General of The United Nations Office at Vienna (UNOV) ,“Criminals are faster to adapt than the international community’s ability to respond.”

Given this grim reality of how quickly crime is adapting to the ebbs and flows of changing times, the international community has forged various alliances like Interpol, Homeland Security, the UN Convention against Transnational Organized Crime and many others “but frankly, we are chasing shadows: we do not really know what we are talking about” Antonio Maria Costa sums up.

The Caribbean is no exception in this regard. Actually Trinidad and Tobago and many other islands in the archipelago serve as key transshipment point for drugs, weapons, human chattel, illegal money and many other contraband to the United States of America and Europe. How Trinidad and Tobago has responded to this threat is no different to that of the international community. Their success though, like their international counterparts, has been varied and called into questions many times. It is in this context that I will attempt to explain the economics behind crime in Trinidad and Tobago using the Economic Approach and the reality of where crime is in the global scale of things.

Trinbago’s Reality

“U.S. Says T&T Police and Immigration Officers Involved in Sex Trafficking”

“Soldier shot dead”

“Rotting bodies found in dump”

“4 Murders in Ten Hours”

“US: Crime in Trinidad & Tobago critical”


These are just some of the glaring headlines that make the newspapers in Trinidad and Tobago. There seems to be a relentless stream of criminal activity in our country and for some reason there is little evidence that it would let up.

The question is: Why?

Let us analyse our current situation in Trinidad and Tobago using the Economic Approach.

As we said before criminals weigh their benefits and costs and decide whether or not to pursue a crime. What are the benefits of crime in Trinidad and Tobago? For starters, criminals enjoy unprecedented cash flows from their activities. They also have access to connections in the legal, armed and judiciary services (a distinction is not being made here between petty crimes and high end organized crime, we will attend to that later). Criminals also enjoy some level of protection because of the fact that they have some of the previously mentioned services allegedly on their payrolls. Access to ‘inside information’ may be considered another benefit to engage crime (Shipment routes for their goods/services and loop holes/blind spots in the system are just some examples). It may appear that engaging in a life of crime seems to be quite lucrative.

So what are some of the associated costs faced by criminals? Firstly, there is the loss of legal income that a criminal could have earned had s/he been in the labour market. Secondly, there is the cost of being detected and consequently charged; this cost is represented in terms of the number years in jail if convicted, the loss of one’s ‘stash’ through confiscation, the cost of paying attorneys to defend them in court and the list goes on indefinitely. Lastly, one of the most glaring costs a criminal could face is the loss of his/her life. No one can truly put a monetary value on an individual’s life. So given the benefits and costs linked to crime, why is there a proliferation of crime in Trinidad and Tobago?

In the earlier analysis in this article, criminals would only engage in a crime if the benefit outweighs the cost. If one were to look at the trend of murders alone in Trinidad and Tobago it would clearly tell us that criminals do not fear the costs associated with being caught in the act. For the period 2008-2013, murders have had a steady rate ranging from 550 (a record high in 2008) to 405 in 2013. This murder rate represents 31 killings per 100,000 inhabitants!

Criminals are well aware of the heavily burdened legal system, the bureaucratic resistance to constitutional reform, the political/economic culture, the rampant corruption in the protective services, flagrant nepotism and low detection and conviction rates. Given these deficiencies, it raises the question of would it not make sense for a young, marginalised, pliable youth to engage in crime? After all, if the protective forces were to apprehend him/her, the snail’s pace at which the judicial system moves may well render their case null and void -depending on the statute of limitation, because of the sheer length of time it took the case to reach the courts. By that time, such a criminal could probably sue the state with a good enough attorney and recoup the costs incurred while s/he was incarcerated.

At present, the costs attached to crime appear to be minimal and barely a deterrent to the average criminal far less for white collared criminals. The benefits however are screaming “welcome home.” If one were to look at high-end, organised crime it would appear that such individuals are untouchable. This echelon of the criminal underworld is well connected to both local and international groups. It is a well-known fact that Trinidad and Tobago is a critical transshipment point for every conceivable narcotic and illegal activity that comes to mind. Therefore it’s only natural for these activities to be aided through organised crime which would undoubtedly involve the armed forces, financial institutions, legal personnel, politicians, port authorities, community leaders, and many others.

So given our current state, how do we address this concern? In order to have a reversal of the criminal activities in Trinidad and Tobago, there needs to be a holistic, clinical, researched and drastic overhaul. Crime as we said initially is partly social, economic and transnational, hence it’s necessary to a multidisciplinary approach to solving it. We need to make sure that the basic units of our society are trained and educated away from a life of crime. Research needs to be done on the types of crimes being committed, the detection and conviction rates, and the length of time to close cases and the sort.

The legal system needs to be revamped to increase conviction rates and therefore act as a deterrent to criminals. Constitutional reform needs to take place. Some of our laws are dated and not au courant with the current velocity and magnitude of crimes. Since these issues of crime are common through the Caribbean region, the Caribbean Community (CARICOM) needs to adopt a regional course of action to stave off the influx of illegal activity into the region collectively. If some of these were to be implemented it could very well make criminals stop and think twice before they commit a crime.


T'Vaughn Lewis is an Economics Graduate of the University of the West Indies.

Photo Courtesy: gbafirm

Top Stories