The economics of bank robberies

At any given moment there is a fixed supply of banks to be robbed in any given the country. The demand for bank robberies depends on several different factors:

-The average level of income in the country. Other things being equal there will be more bank robberies in poor countries than in rich countries.

-The severity of criminal law. Countries with longer prison sentences for robbing a bank will have fewer bank robberies than countries with more lenient criminal legislation in this respect, ceteris paribus.

-The efficiency of the police force and of the judicial system. Countries with both a very efficient police force which with a high degree of probability promptly catches the thieves or kills them and a very efficient judicial system, which promptly puts them behind bars, tend to have fewer bank robberies than countries with both an inefficient police force and judicial system, other things being equal.

Consider now two countries, Portugal and Brazil. The market for bank robberies in Brazil is far larger than the market for bank robberies in Portugal, because of the larger size of Brazil and its lower level of income. Assuming the same number of bank branches per thousand population in both countries, the benefit of robbing a bank in Portugal is higher than in Brasil since, because of the higher level of income prevailing in Portugal, the Portuguese bank branch is expected to have more money in its vaults than its Brazilian counterpart.

The main cost of robbing a bank consists essentially of the probability of the thieves being caught and the harshness with which they will be treated by police and the justice system. In this respect the expected cost of robbing a bank seems to be far lower in Portugal than in Brazil, judging from the reputation of brutality that has been attached to the Brazilian police and the sub-human conditions that seem prevail in Brazilian prisons.

Since the rewards are higher, and the costs lower, of robbing a bank in Portugal as compared to Brazil, under conditions of free mouvement of people between the two countries, bank robbers tend to migrate from Brazil to Portugal.

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There seems to be only two solutions to deal with this problem. First, Portugal becoming more selective in its immigration policy with regard to Brazil. Second, Portugal increasing the harshness with which its police and judicial systems deal with bank robbers. If neither of these solutions is adopted and if, instead, a liberal immigration policy is pursued soon we will have in the country a criminal scene with regard to bank robberies very much identical to that of Brazil.