Crime, Self-Protection and Business Growth in Cote d’Ivoire

Abstract

Cote d’Ivoire was considered as an island of stability and economic prosperity in a region of stagnation, and political turmoil. The situation was reversed in the early 2000, when a decade of instability led to a surge in crime and violence. Yet, very little was known about the economic consequences of crime at the firm level. This paper tested empirically the impact of crime on business activity in Cote d’Ivoire. Using a recent World Bank enterprise survey dataset and a Heckman two-step procedure we showed that crime and private provision of security negatively impacted firms’ profit and investment.