EXTENDED SUMMARY

Since the 1980s, income inequalities have been increasing in both developed and developing countries. This trend is closely related to the increase in financial crises that affected the global economy in the same period. In many developing countries, the adoption of fiscal and adjustment policies led to a substantial increase in inequality. Moreover, the increase in income inequality in advanced economies also seems to be more related to endogenous financial crises. In other words, there seems to be a strong link between the increase in income inequality and the frequency of financial crises in capitalist systems, whether in advanced economies or developing economies involved in the globalization process.

High income inequality can have unintended political and social consequences. Where state institutions are weak, inequality exacerbates the problem of creating and maintaining an accountable government. It increases the likelihood of economic and social policies that impede growth, and where poverty reduction and social institutions are fragile, inequality further discourages the civic and social life that underpins the collective decision-making necessary for healthy societies to function. In other words, high inequality is associated with higher crime rates, lower life expectancy and high conflict.

In the late 1990s Western policy makers are renewing the old emphasis on targeting social policies and social scientists cannot agree on the best strategy to reduce poverty and inequality. While universalism is gradually being accepted in many academic circles outside economics, the earnings relevance of social insurance benefits is still strongly questioned. In European Union countries, this questioning has been reinforced by increasing pressure to reduce budget deficits and downsize the public sector. Comparative analyses involving countries with different types of welfare state institutions can help us understand the consequences of different strategies to reduce poverty and inequality.

Many studies show that access to opportunities in the labor market, especially access to income-related opportunities, not only affects criminal behavior, but also crime rates are affected by opportunities in the labor market. In particular, it is observed that there is an inverse relationship such as an increase in crime rates when wage incomes are reduced. Similarly, it is also argued that there is a strong relationship between unemployment, where it is not possible to earn income from the labor market, and crime.

Poverty is a subjective state relative to what others have, rather than an objective expression such as the presence or absence of a certain amount of property or a measure of wealth. Similarly, people are poor when they lack the opportunities, well-being and self-esteem that are considered normal in their society. Consequently, relative poverty, rather than absolute poverty, is more appropriate to explain regional differences in criminal behavior. In this sense, the rates of criminal acts vary according to the degree of inequality in wealth and income distribution.

In the light of this information, the panel data analysis method was used in this study, which examines the effect of income inequality and poverty rate on crime rate for countries with low and high Gini coefficients based on data for the years 2008-2019. When the analyses conducted in the study are evaluated in general, it is seen that the increasing effect of the increase in the poverty rate on the crime rate in countries with higher income inequality is realized at a lower level compared to countries with low income inequality. In addition, while the increase in the Gini coefficient increases the crime rate in countries with relatively low income inequality, there is no significant relationship between the increase in the Gini coefficient and the crime rate in countries with relatively high income inequality.

Countries with low income inequality are more sensitive to poverty than countries with high inequality. Considering that the crime rate is based on convicted persons, it is thought that the justice systems and reporting rates of countries also have an impact on the results. In other words, when the crime rate is calculated based on reported crimes rather than convictions, which can also be considered as the final decision stage, the results may be different. When evaluated in economic terms, it can be said that the fact that poverty rates are generally high in countries with high income inequality may cause people’s sensitivity to poverty to be lower in these countries and thus the direct effect on the crime rate may be lower than in countries with low Gini coefficients.

In addition, it is thought that an increase in income inequality may not lead to an increase in the crime rate if it does not significantly increase the poverty rate. While the study argues that poverty is a factor that leads individuals to crime in a society, it is pointed out that it is difficult to make a definitive judgment due to the conceptual ambiguities of both crime and poverty.