Border Walls and the Economics of Crime
We estimate the causal eﬀect of a large, plausibly random border fortiﬁcation project on crime in Israel. The timing of border wall construction was staggered, disrupting smuggling access to some towns before others. Using data on the location of car thefts before and after fortiﬁcation, we ﬁnd a large deterrent eﬀect in protected towns (41% de-cline) and substantial displacement to not-yet-protected towns (34% increase). For some protected towns, fortiﬁcation also arbitrarily increased the length of preferred smuggling routes. These granular shocks to smuggling costs further deterred auto theft (6% drop per kilometer). Drawing on novel arrest records, we ﬁnd that the displacement of crime to unprotected towns is not driven by labor relocation from protected townships. In-stead, local criminal organizations in unprotected towns increased their participation in car theft. We also ﬁnd evidence that wall construction induced substitution from cross-border smuggling to other forms of property crime where assets are liquidated in Israel.
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