Austin L. Wright , Anna Getmansky; Guy Grossman

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.

(working paper)

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