Friday, January 10, 2014



IWS Documented News Service


Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau



World Bank



by Michael Goldberg, Kwang Wook Kim, and Maria Ariano


[full-text, 109 pages]



Crime and violence inflict high costs on the private sector—costs that are rising globally, according to the World Bank’s Enterprise Surveys, discussions with chambers and associations, and the Bank’s Country Partnership Strategies, which reference the losses in terms of gross domestic product (GDP). In Latin America and the Caribbean, for example, losses due to crime and violence have been estimated at 9 percent of GDP in Honduras, 7.7 percent in El Salvador, and 3.6 percent in Costa Rica. In sectors such as clothing assembly, international purchasers can shift know-how and capital quickly to less violent destinations, while other sectors such as extractive industries are more likely to stay despite rising violence. Behind the statistics are human costs: lost jobs; shifting of businesses’ working capital from productive uses to security firms; and an increase in contraband, fraud and corruption, and “rule of law” issues. In this book, original case studies from Brazil, Colombia, Jamaica, Mexico, Nepal, and Rwanda illustrate the specific challenges to businesses and the coping mechanisms that firms and groups of firms have used successfully against crime and violence. The book’s findings have implications for the private sector, governments, and the World Bank’s efforts to support both under difficult circumstances.


Foreword ix

Acknowledgments xi

About the Authors xiii

Abbreviations xv


Chapter 1 The Nature, Scale, and Scope of Private Sector Responses to Crime and Violence 1

Introduction 1

Study Scope and Methods 2

Note 4

References 5


Chapter 2 Crime, Violence, and the Economy 7

Factors Contributing to Crime and Violence 7

Indicators of Crime and Violence 8

Comparing the Impacts of Crime and Violence 9

References 11


Chapter 3 Coping Mechanisms of Private Firms: Analysis of

Global Cases 13

Overview of Case Studies 13

How Crime and Violence Affect Firms 13

Coping Mechanisms 16

Analysis and Lessons Learned 22

Policy Implications 24

Notes 25

References 26


Chapter 4 World Bank Group Work: From Policies and Research

to Operational Initiatives 27

Growing Focus on Crime and Violence 27

Private Sector Development (PSD) Initiatives 27

Non-PSD Initiatives 28

Notes 30

References 31


Chapter 5 World Bank Group Support for Private Sector

Development in Environments of Crime and Violence 33

Opportunities for Support 33

Moving the Agenda Forward 34

Operational and Research Issues 36

Notes 37

References 37


Chapter 6 Case Studies 39

Case 1: Medellín, Colombia—How the Public and Private Sectors Have Coped with Violence 39

Case 2: Rio de Janeiro, Brazil—The Favelas and the Private Sector: An Increasingly Safe Bet? 49

Case 3: Jamaica—Coping with Violence in Paradise 55

Case 4: Mexico—Public-Private Responses to Violence 63

Case 5: Nepal—Private Sector’s Varied Responses to Violence and Crime 69

Case 6: Rwanda—Turning the Tide of Violence in Postconflict Settings through Value Chains 76

Notes 82

References 84



1.1 Literature Review on the Role of Firms Environments Affected by Violence and Conflict 3

4.1 Public-Private Dialogue in Investment Climate Interventions 29

6.1 The Case of Mexico City: Mobile Apps to Find Gangs and

Foster Accountability with the Local Government 68



2.1 Countries with the Highest Homicide Rates 8

2.2 Homicide Rates in Case Study Countries 8

2.3 Homicide Rate Trends in Central America, Selected Countries, 1999–2009 9

2.4 Security Constraints and Costs of Doing Business in Case Study Countries Relative to Global Averages 10

6.1 Homicide Rates in Medellín, Colombia, 1965–2008 42

6.2 Impact of Crime on Selected Business Practices in Jamaica, 2001 57

6.3 Private Security Costs as Percentage of Firm Revenue, by Firm Size, in Jamaica, 2001 58

6.4 Crime Protection Actions by Firms in Jamaica 59

6.5 Flankers Peace & Justice Center, Jamaica, Built with Support from Sandals Foundation 60



3.1 Overview of Case Studies for How Firms Cope with Crime and Violence 14

3.2 Matrix of Firm Strategies to Cope with Crime and Violence 17

4.1 Recent World Bank CASs and CPSs Addressing Crime and Violence in Latin America and the Caribbean 28

6.1 Medellín, Colombia: Summary of Key Crime and Violence Indicators and Coping Mechanisms 41

6.2 Rio de Janeiro: Summary of Key Crime and Violence Indicators and Coping Mechanisms 50

6.3 Jamaica: Summary of Key Crime and Violence Indicators and Coping Mechanisms 56

6.4 Victimization of Firms, by Sector and Type of Crime in Jamaica, 2001 57

6.5 Mexico: Summary of Key Crime and Violence Indicators and Coping Mechanisms 63

6.6 Nepal: Summary of Key Crime and Violence Indicators and Coping Mechanisms 70

6.7 Strategies of Nepalese Firms to Cope with Political Instability, Crime, and Violence 71

6.8 Rwanda: Summary of Key Crime and Violence Indicators and Coping Mechanisms 76




This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.



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