Stereotypes

Latvia is a country where crime is rife because of police budget cuts, where people kill themselves, kill each other or just mow each other down on the street because of excessive drinking. And it is all caused by austerity, you know!

At least that is what readers of the Financial Times are told when they read this piece by professors Michael Hudson and Jeffrey Sommers, both from the USA. They should know because, as they write “Yet few of the enthusiastic commentators [favouring austerity/seeing austerity as successful in Latvia] have spent enough time in the country to understand what happened”, implying that they certainly know better.

Yet they don’t – looking at the data, the first place one should look, provides a rather different picture. Allow me to show that with some graphs and make some conclusions at the end.

“Crime is high”, they write. Eurostat provides data up until and including 2009, the year GDP really declined, unemployment rose and recession took hold. Here is data for the European Union, total crimes adjusted for size of population and – wait a minute! – Sweden is number one???

Figure 1: Number of recorded crimes per one million inhabitants, 2009

Source: Eurostat and own calculations

Note: Ireland missing due to lack of data for 2009 for number of crimes

Extremely efficient Swedish police officers or is throwing chewing gum paper also a crime in Sweden? But clearly representing different ways of reporting crimes and thus not useful for comparisons. Looking into the sub-categories (violent crime, burglaries etc.) do not, however, reveal Latvia as a country of high crime either – only one category does so let us show it here for the sake of the authors of the FT piece.

Figure 2: Number of homicides per one million inhabitants, 2009

Source: Eurostat and own calculations

Note: UK missing due to data being split between England, Scotland, Wales and N Ireland

Unpleasant but actually, with 109 homicides in 2009, the 3rd lowest since independence (2010 and 2011 record even lower numbers) and a far cry from 1993 (a staggering 429). And, oh yes, a rate, though high, which is still below that of the USA. The numbers for individual crimes 1990 – 2011 are available for all to see and check at the Central Statistical Bureau’s web site here. In virtually all cases crime has NOT risen during the crisis and, interestingly, the biggest number of crimes (adjusted for population size) was recorded in that year of severe austerity – ehh – boom year, 2006.

“Police budget cuts”. Yes, the number of police officers has been cut as part of the austerity measures (again, data is available from Eurostat) but is Latvia ‘underpoliced’? I think not, cf. Figure 3.

Figure 3: Number of police officers per one million inhabitants, 2009

Source: Eurostat

Note: Greece and Italy missing due to lack of 2009 data for number of police officers

Latvia is somewhere in the middle – perhaps there were too many police officers before and some pruning has reduced unnecessary public expenditure?

“It [Latvia] has among Europe’s highest rates of suicide”. True (see Figure 4) and very sad but not telling the whole story: a) Suicide rates were 50% higher in Latvia at the start of this millennium and b) high rates are very much a phenomenon of many ex-Soviet Republics – Latvia is far from alone. (See this link if you trust Wikipedia). Rates of suicide have risen from 2007 to 2009 in Latvia and I can easily see that related to austerity but rates did the same in e.g. Poland which did not have a recession, at least indicating that one should be careful when trying to link suicides and (lack of) economic well-being, however probable such a link may be.

Figure 4: Number of suicides per one million inhabitants, 2009

Source: Eurostat and own calculations

“It has among Europe’s highest rates of … road deaths caused by drink driving”. I am not a fan of the average Latvian driver and I don’t have data on this kind of death. But the Central Statistical Bureau (same link as before) provides a table for ‘violation of traffic regulations resulting in serious injuries’. Numbers here have almost halved since the recession started; whether they are still high by international standards I don’t know. But a more serious question is: What exactly is the supposed link between deaths caused by drunk-driving on the one hand and austerity on the other??? Beats me…

In all fairness, Hudson and Sommers also refer to declining birth rates (true), migration (true) and brain drain (also true) – but how can they make mistakes as demonstrated above? It ruins whatever credibility the rest of the piece might have.

It’s just prejudice, isn’t it?: Lots of crime, suicides, drunk drivers – hey, that’s what we should expect from a small backwards FSU country, right? Why even bother checking the data!

I thought Estonian President Ilves was over the top when he tweeted about Paul Krugman’s alleged patronizing of Estonia. I still think he was over the top but this here shows he has a point…

Hudson and Sommers blame ‘austerity fans’ for not having spent enough time here – perhaps they should try to be here a bit more themselves???

And in the meantime FT readers will know for a ‘fact’ that here we kill ourselves and each other, preferably under the influence.

P.S.: And by the way what about the content of their article? That’s really what I should be dealing with but this piece is too long already. Later…

Morten Hansen is Head of Economics Department, Stockholm School of Economics in Riga