This paper presents a structural model of crime and output. Individuals make an occupational
choice between criminal and legal activities. The return to becoming a criminal is
endogenously determined in a general equilibrium together with the level of crime and
economic activity. I calibrate the model to the Northern Triangle countries and conduct
several policy experiments. I find that for a country like Honduras crime reduces GDP by
about 3 percent through its negative effect on employment indirectly, in addition to direct
costs of crime associated with material losses, which are in line with literature estimates.
Also, the model generates a non-linear effect of crime on output and vice versa. On average I
find that a one percent increase in output per capita implies about ½ percent decline in crime,
while a decrease of about 5 percent in crime leads to about one percent increase in output per
capita. These positive effects are larger if the initial level of crime is larger.
International standards for measuring foreign direct investment (FDI) have become important in today’s global economy, where multinational enterprises exercise economic clout and FDI statistics can reflect investor sentiment about the climate of investment in a country. This joint IMF/OECD report assesses progress toward standardization in the compilation of FDI statistics and provides information on statistical methodologies in 61 countries. The report is based on data from the 2001 update of the joint IMF/OECD Survey of Implementation of Methodological Standards for Direct Investment (SIMSDI), which covers 30 OECD countries and 31 other IMF member countries