The Transparency Of Governmental Organizations

Published Date: 02 Nov 2017

According to the results obtained, estimated regression line is fitted as follows

Functional Form

Crime = f (population, inflation, unemployment, household consumption, Gross domestic product)

Algebraic form

lnCrime = β0 + β1lnPop + β2lnUn + β3lnIn + β4lnHHC + β5lnGDP

Mathematical form

LnCrime = 6.374 + 0.271lnPOP + 0.034lnUN + 0.011lnIN – 0.005lnHHC – 0.023lnGDP

The above equation shows that crime, the dependent variable in this particular model has a direct positive relation with population, unemployment and inflation. Whereas, it has negative relation with household consumption and GDP.

A percentage increase in population brings about 0.271 percent increase in crime or partial elasticity of crime with respect to population is 0.271 assuming all other variables to be constant.

A percentage increase in unemployment brings about 0.034 percent increase in crime or partial elasticity of crime with respect to unemployment is 0.034 assuming all other variables to be constant.

A percentage increase in inflation brings about 0.011 percent increase in crime or partial elasticity of crime with respect to inflation is 0.011 assuming all other variables to be constant.

A percentage increase in household consumption brings about 0.005 percent decrease in crime or partial elasticity of crime with respect to household consumption is 0.005 assuming all other variables to be constant.

A percentage increase in GDP brings about 0.023 percent decrease in crime or partial elasticity of crime with respect to GDP is 0.023 assuming all other variables to be constant.

DISCUSSION

In recent years, crime has become a growing concern in Pakistan. Statistics show that crime rate in Pakistan has increased by more than fifty percent since last few decades and is still following an ascending trend. As Pakistan is a developing country, most of the population lives below the poverty line, displaying the low GDP per head and the income inequality in terms of the concentration of resources in the hands of a few rich people; this combined with the inefficient regulatory and legal system of Pakistan is hindering the economic growth of Pakistan, which further provides an incentive to criminals to act in order to win in the battle for resources currently going on in the country, hence forming a vicious circle.

Keeping this drastic increase in mind, this study was conducted to analyze and assess the impact of socioeconomic factors on the crime rate to determine the causal relationship between them to identify policy changes required to curb the crime rate in Pakistan. For this purpose population, unemployment, inflation, household consumption and GDP are taken as independent variables to check their impact on crime for the period 1980-2011.

Multiple regression is used to analyze the socio economic determinants of crime. The multiple regression for the period 1980-2011 shows that 85% of the variation in the dependent variable i.e. crime is defined by the independent variables i.e. population, unemployment, inflation, household consumption and gross domestic product. Therefore, the formulated model turned out to be statistically significant and the model is a best fit indicating that all the independent variables are important in explaining the crime trend in Pakistan. The results of regression analysis show that socio-economic factors; population, unemployment, inflation and GDP have a high significant impact on crime in Pakistan, whereas household consumption has a weak significant impact on crime in Pakistan i.e. it makes a significant contribution in the model but it has a relatively lower significance level as compared to the other four factors.

The results reveal that on percentage change in population brings about 0.271 percent increase in crime. An increase in population implies shortage of already scarce resources, so in order to win this battle of resources every individual will resort to illegal activities and sources, thus increasing overall level f crime. Hence population is positively related to crime. The model shows a positive sign, which complies with the underlying theory. It is also statistically significant as population has a p-value of 0.000, which is less than 0.05.

This not only supports our results from literature but also supports our alternate hypothesis. As the variable comes out to be significant, this means we will reject our null hypothesis. Population as suggested by the regression results is an important factor in determining the level of crime in general as shown by the vast amount of literature available on the topic. As population increase, shortage of resources is created as a result they feel that it is their right to earn a living by hook or by crook. This feeling leads to crime and robberies are seen as a way to earn a lot of money in a short period of time.

A percentage change in unemployment brings about 0.034 percent increase in crime. An increase in unemployment implies that when people will be jobless, their living standards will fall as their income falls, a sense of deprivation and frustration will be generated which will invoke people to engage in illegal activities to satisfy their needs and wants. . As Pakistan is facing increasing levels of unemployment, this persistent increase will invoke the unemployed to resort to different types of crimes. Hence unemployment is positively related to crime. The model shows a positive sign, which complies with the underlying theory. It is also statistically significant as unemployment has a p-value of 0.035, which is less than 0.05.

As the variable comes out to be significant, we reject the null hypothesis that unemployment has no influence on kidnapping. This not only supports our results from literature but also supports our alternate hypothesis. This goes on to suggest that if more and more educated people end up without jobs this will raise the level of anarchy and frustration in the country and this will increase crime. Thus the results suggest that the government should try and cut down the reasons for crime by providing greater employment opportunities by investing more in labour intensive technologies.

The results reveal that on percentage change in inflation brings about 0.011 percent increase in crime. An increase in inflation implies lesser real income, hence reducing the purchasing power consumers. As Pakistan has a majority of poor, this persistent increase in prices will invoke them to resort to crimes like kidnapping, robbery, murder e.t.c which provides an opportunity for ransom money. Hence inflation is positively related to crime. The model shows a positive sign, which complies with the underlying theory. It is also statistically significant as Inflation has a p-value of 0.011, which is less than 0.05.

This not only supports our results from literature but also supports our alternate hypothesis. As the variable comes out to be significant, this means we will reject our null hypothesis. The results suggest that the government should try and cut down the reasons for crime, which are majorly based on deteriorating real income situation for the majority of the poor in the country.

A percentage change in household consumption brings about 0.005 percent decrease in crime. A decrease in household consumption implies lesser real income, hence reducing the purchasing power consumers and thus lowering the living standards. As Pakistan has a majority of poor which have lower consumption expenditures due to lower income levels, this in order to fulfill their needs and wants they will be forced to resort to crimes like kidnapping, robbery, murder e.t.c which provides an opportunity for ransom money. Hence household consumption is negatively related to crime. The model shows a negative sign, which complies with the underlying theory. It is also statistically significant as household consumption has a p-value of 0.018, which is less than 0.05.

It is important to note that the lower level of significance is due to the fact that only poor, unemployed illiterate people are not engaged in crime rather wealthy, rich people like feudal lords, smugglers, bureaucrats, politicians e.t.c. which are very well off but still they are engaged in illegal activities just to grab more and more money to satisfy their unending and selfish wants. This not only supports our results from literature but also supports our alternate hypothesis. The results suggest that the government should try and cut down the reasons for crime, which are majorly based on deteriorating real income situation for the majority of the poor in the country.

A percentage change in GDP brings about 0.023 percent decrease in crime. A decrease in GDP implies lower economic growth, which means lower investment activity, lesser output, lower levels of national income, decrease in employment which further decreases the income levels, hence lower standards of living. As a result people will engage in illegal means to achieve their goals and will thus result in increasing levels of crime. Thus GDP is negatively related to crime. The model shows a negative sign, which complies with the underlying theory. It is also statistically significant as GDP has a p-value of 0.005, which is less than 0.05.

GDP as suggested by the regression results is found to be an important factor in determining crime trend as shown by the vast amount of literature available on the topic. This not only supports our results from literature but also supports our alternate hypothesis. As the variable comes out to be significant, this means we will reject our null hypothesis. The results suggest that the government should try and cut down the reasons for crime, which are majorly based on lower economic growth and lower standards of living.

Pakistan being a developing country is facing many challenges and hardships in its growth journey. A vicious circle of poverty that is low income, low savings, low investment, lower economic growth, lower generation of national income and hence lower standards of living is evident in case of Pakistan. The study suggests that lower crime rate can be achieved through increased GDP, increased household consumption, increased employment and control over population and inflation in the long run.

CONCLUSION

It is concluded that several socio economic factors are responsible for increasing crime in Pakistan. Statistics show that in the last ten years, the crime rate in Pakistan has increased by fifty percent; hence keeping that drastic increase in mind, this study was conducted to assess the impact of socioeconomic factors on the crime rate to determine the causal relationship between them to identify policy changes required to curb the crime rate in Pakistan.

In the models, population, unemployment inflation and GDP had a significant effect on the crime rate, which is consistent with the findings of the literature, that inflationary pressures diminish the purchasing power, hence forcing people to resort to criminal activities. This effect is especially strong in the developing economy of Pakistan, where the average income for the majority of households is already low and the constant inflation has created desperation amongst most of the lower class families to provide for basic necessities. Hence unemployment and increasing population, combined with inflation creates economic incentives to participate in criminal activities, as indicated by simultaneous rise in the unemployment and population growth rate and the crime rates in Pakistan. On the other hand household consumption had a negative effect on the crime rate; this implies the importance of availability of basic necessities by the government and self satisfaction of the consumers.

Therefore, policies to control crime should be implemented after proper assessment and evaluation in order to promote economic growth.

LIMITATION

The research process was not as smooth as first thought, the study had certain limitations and it would be important to know these because the accuracy of the research depends on them.

Data availability was one of the major problems; there were certain variables which had missing data points. This resulted in the use of data interpolation. Although data interpolation normally means reduced integrity of the results as this means the natural fluctuations of the data are lost but it is important to note that good care was taken when generating data.

Only those explanatory variables are selected which are considered as important independent factors influencing the dependent variable. This means that all other factors other than unemployment, population, population, household consumption and GDP are assumed to be constant.

RECOMMENDATIONS

Pakistan is a country which lacks sustainability of reforms and policies. Best way to achieve lower crime rates is to control population and to improve the quality of institution.

Transparency of governmental organizations should be improved so that they can be held accountable for their actions, which will lead to a reduction in corruption and the resulting crime patterns stemming from it.

Monetary and fiscal policy should be adjusted such as to control inflation.

More employment opportunities should be offered especially for those with tertiary level education in order to reduce incidents of organized crime as educated unemployment usually leads to insecurity with regards to the benefits of investing in education.

The infrastructure should be improved so as to accommodate the increasing population and measures should be taken to reduce the poverty headcount ratio.

Also, in order to make crime control policies effective, reforms should be introduced in the judicial, police and legislative structures so as to make them more efficient.

It is suggested that in the case of Pakistan, where corruption and bribery flourishes, very high monetary sanctions should be imposed for criminal offenses (as indicated by Garoupa & Klerman (2004)) in order to lessen this culture of corruption in law-enforcement bodies.

Political influence in law enforcement departments should be reduced so that these departments can maintain law and order situation without any pressure so that justice should be for all.

More investment opportunities should be provided, so that greater output is produced which result in greater national income and hence increase in GDP.