The macroeconomic impact of crime

Crime imposes significant economic and fiscal costs through its effects on productivity, investment, public finances, and institutional trust. While the macroeconomic consequences of violent crime are increasingly documented, less attention has been paid to the effectiveness of policies aimed at reducing crime and improving public safety. This paper provides a policy-oriented review of evidence-based crime reduction strategies across OECD and Latin American countries. It first discusses the main channels through which crime affects economic outcomes and reviews recent trends in homicides, drug trafficking, money laundering, and cybercrime. The paper then develops a policy framework structured around three complementary pillars: control, prevention, and rehabilitation and reintegration. Drawing on OECD country desk inputs and a review of impact evaluations, it assesses which interventions have proven most effective in reducing crime and recidivism. The analysis highlights the importance of integrated approaches combining targeted law enforcement with social prevention and rehabilitation measures. It also underscores the growing relevance of cybercrime and digital resilience for macroeconomic performance and public policy. The paper concludes that systematic evaluation and stronger integration of crime-related risks into macroeconomic analysis can help improve the effectiveness and efficiency of public spending on security and crime reduction.