May 14, 2018

Protection from predators

What are the economic consequences when governments don't keep law and order?

A key role of government is to maintain law and order. Beyond the obvious concerns for justice and public safety, there are economic consequences, as well. A paper by Timothy Besley and Hannes Mueller in the April issue of the American Economic Journal: Macroeconomics examines the impact on a nation’s economy when the state fails to protect companies from criminal threats.