Countries with a stronger market orientation may experience lower rates of homicide, according to a new study from the University of Georgia.
Market orientation and market integration refer to how freely a nation's economy functions within a framework of legal rights and freedoms such as enforcing contracts, protecting property and ensuring equal opportunity.
In this study, the researchers found that a stronger market orientation could decrease murder rates, with even a one-point shift on a market freedom scale leading to a 22% drop in homicides.
The more time you spend around people that are unlike you, you begin to realize that we all have similar wants and needs.
William Pridemore, Franklin College of Arts & Sciences
Countries that allow buying, selling, working and investing with fewer obstacles and more legal protection were more capable of building peaceful, cooperative communities moving forward.
"If a trader wants to make a living, they must trade with all sorts of people who look or speak differently from them," said William Pridemore, lead author of the study, Marienthal Professor of Sociology and head of the department of sociology in the UGA Franklin College of Arts and Sciences. "The more this happens, the more it can also actually increase social cohesion. The more time you spend around people that are unlike you, you begin to realize that we all have similar wants and needs. It helps to humanize us to each other."
Drop in homicides strongest in countries beginning a market shift
Using annual data from 88 countries across two decades, the researchers employed a scale of market orientation using scores from the Economic Freedom of the World Index.
By comparing things including tax rates, business and labor market regulation, judicial independence and property rights alongside homicide rates, the researchers found countries that embraced voluntary exchange were more likely to have lower homicide rates.
On the market orientation scale that ranges from zero to 10, a one-point increase - which represents the strengthening of things like property rights and open trade - corresponded with homicide rates dropping by one-fifth.
We now know that … market integration varies with violence rates.
William Pridemore
"Violence rates tell us something deeply fundamental about a society. They tap into societal, cultural and historical factors. We now know that, together with several other structural and cultural characteristics, market integration varies with violence rates," Pridemore said. "It's really important to see this variation from nation to nation and to recognize it has a meaningful, real-world effect."
The effect was most prominent in countries that were beginning to shift toward freer markets. But it was absent for countries that were above average on market orientation, meaning that once market integration reaches a particular limit it no longer exerts a violence reduction effect.
The only exception to the trend were countries located in Latin America where there was no association and homicides remained high despite increasing market orientation in recent decades.
Open exchange creates a sense of self-control and belonging
On an individual level, market development may promote a sense of individual accountability and self-control, the researchers said.
With that happening on a broad scale, countries were more likely to be peaceful.
As market orientation develops, individuals and groups are more interconnected and, as a result, may become more empathetic after being exposed to different types of people through doing business with and working with each other.
"In smaller, more rural and agriculturally oriented societies, if your wagon wheel broke, you knew how to fix it. If your cow was sick, you likely knew what it was ailing from and were able to get it back in good health," Pridemore said. "As markets, societies and nations develop, they become more specialized. Most individuals don't know how to fix their car or cure their pets of a serious illness, and we become mutually dependent upon specialization. But the more we depend on each other, the more respect we have for each other."
The study suggests that as markets grow, state institutions as a whole become stronger.
"Markets don't develop on their own but require structural stability - state power, legal and democratic frameworks - to develop," Pridemore said. This stability and routinization of conflict resolution can reduce violence rates.
The study was published in Criminology and is co-authored by University of Iowa Assistant Professor Meghan Rogers.
