Interactions of Economy and Acquisitive Crime in Cyprus 2

2019

Does Acquisitive crime affect the economy, or is it affected by the economy? A case study of Cyprus.

Student No: 20764782

MD4995: MBA Dissertation

University of Central Lancashire

Cyprus School of Business and Management

MBA Course 2018-2019, Sem 2 and 3

Date: 31-08-2019

Table of Contents

Abstract 4

CHAPTER ONE 5

1.0 Introduction 5

1.2 "What is the effect of crime on economic growth?" 8

1.3 Crime Threats 8

1.4 The relationship between crime and economic growth 10

1.4.1 Economic Concerns 10

1.4.2 Tourism and Crime in Cyprus 10

1.5 Problem statement 16

1.6 Research Questions 16

1.7 Research Hypothesis 16

1.8 Aim 16

1.9 Objectives 16

CHAPTER TWO 18

2.0 Literature 18

2.1 Economic costs of crime 21

2.2 Determinants of economic growth 23

2.3 Effects of acquisitive crime on economic growth in Cyprus 25

2.4 Crime growth in the Republic of Cyprus 27

CHAPTER THREE 30

3.0 Methodology 30

CHAPTER FOUR 33

4.0 Findings and Analysis 33

4.1 Opening of the Crossing Points 35

4.2 Global Economic Crisis 37

4.3 Introduction of New Laws 41

4.4 Accession of Cyprus in the European Union 41

CHAPTER FIVE 44

5.0 Conclusions and Recommendations 44

Bibliography 47
This study explores crime rates in Cyprus during the period 2003-2013 and identifies the main factors
causing crime tendencies. Criminal statistics, based on official police recorded data, show divergent
trends, as a result of the several events taking place concerning the economy, the political and social
life, not only in Cyprus but worldwide. Apart from legislative changes and the introduction of new laws,
these events are especially the opening of the crossing points in the UN-patrolled buffer zone. This zone
separates the Turkish-occupied northern part of Cyprus from the free areas of the Republic of Cyprus in
2003, the accession of Cyprus in the European Union in 2004 and the global economic crisis that
occurred in 2009. Even though there are different tendencies for specific types of offences, in general,
recorded crime in Cyprus gradually increases, reaching its peak in 2011. The patterns in crime reflected
by the socio-economic factors are a warning of the change of Cyprus' small society and a challenge to
policymakers in the mission of crime prevention. This dissertation considers various factors such as
bribery, corruption, fraud, shoplifting, burglary, and robbery, among other factors related to crime.
However, the research primarily focuses on economic crime, as the primary form of crime that affects
the economy of Cyprus

Also, the research focuses on various research statements (problem statements) such as the nature of
the interaction between economy and acquisitive crime in Cyprus, the effect of the economy towards
acquisitive crime and effects of acquisitive crime on the economy and which part has more effects.
Through the research questions, various hypotheses will be derived, and each hypothesis will have its
view. Therefore, the literature review of the paper involves extensive review of sources such as articles
and other related articles where sources with the same information about crime in general. The
information gathered forms the discussions, conclusions and recommendations of the study.

CHAPTER ONE

1.0 Introduction

Since the recession experience in Cyprus in 2009, there has been a notable decline in the tourism and
shipping industry due to crime-related reasons. Adamides & Christou, (2015, p. 9) reports that the main
reason for the rise in criminal activities is the high rates of unemployment. According to Yang (2013,
p.99), the rates of acquisitive crimes are rising each day and form about 60% of the total crimes
committed within the last decade. Despite these statistics, Cyprus is considered one of the safest places
in Europe and the world. Cyprus majorly experiences non-assailant petty thefts acquisitive crimes.

Criminal activity is defined as the willful or negligent use of violence of the threat of the same to cause
physical injury or death to another person. Additionally, the attempt to deprive or the actual deprivation
of somebody's belongings as well as wilfully damaging them. Other forms of criminal activities include,
drug offences, impaired driving which resulted in someone's injury or death, betting, possession of
weapons, arson and the abuse of public office for private or political gain are also crimes which might
have an effect on people or property but do not make part of the above two categories. A criminal
offence is punishable under the law upon conviction. Such activities bear a negative impact on the
welfare of the society because crime impedes the creation and development of a country's sustainable
development goals and a proper functioning economy both in the public and private sector.

McCollister et al. (2010) assert that criminal activities are expensive for the economy of a country and
results in a substantial loss of funds both at the individual, community and the state level. For example,
in 2007, there were more than 23 million crimes were commented in the United States. These crimes
translated into nearly $15 billion at the individual level and a whopping $179 billion financial burden to
the country as costs of lawsuits, judicial undertakings, correction and police protection. The finances are
termed as wasted because, in the case of a prudent and alternative investment by the nation, good
returns would be achieved. Therefore, it seems reasonable to think that crime hurts the economic
growth of a country (Gaibulloev & Sandler, 2008).

Positive economic growth is imperative for a country; therefore, the determinant factors of it have
received increasing attention over the past twenty years. The first theory to stress the role of
determinants for economic growth, which is also the fundamental one, was Solow's growth model
(Solow, 1956). It stresses the importance of investments as a determinant for economic growth. Further
research revealed other crucial determinants of economic growth, such as the stock of human capital
(Mincer, 1981) and innovation (Aghion & Howitt, 1992). Macroeconomic factors are also essential, but
Fischer (1993) stresses the most important ones and presents reasons that they are not enough for
economic growth. Foreign direct investment (FDI) is one of the primary sources of technology transfer
between two countries, which adds relatively more to economic growth (Borensztein et al., 1998;
Lensink & Hermesa, 2003). However, without trade liberalization, which in the majority of the cases
leads to FDI (Martens, 2008), the economic growth cannot be sustained. Besides, the credibility of
governments plays a vital role in openness to trade by diminishing uncertainty and stabilizing it in order
to create more significant economic growth (Lensink et al., 1999).

Many researchers have always endeavoured to establish the impact of crime on a country's economic
growth in their literary works. They have always estimated the direct and indirect costs of crime to the
economy, however, one thing is for sure, there is enough evidence to prove that this subject is not
exhaustively covered by the researchers (McCollister et al., 2010; Anderson, 1999). While some
researchers are of the view that, the impacts on crime on economic growth rem\in hazy and unclear
(Goulas & Zervoyianni, 2012; Burnham et al., 2004) or even non-existent (Mauro & Carmeci, 2007; Ray
et al., 2009), many are of the opinion that crime has a major negative impact on economic growth of a
country

1.2 Crime Threats

Even though crimes of opportunity and crime-related incidences occasionally occur, Cyprus is generally a
safe country compared to other European countries of similar sizes. The most witnessed street crimes
are non-confrontational and non-violent but are rather petty thefts or scams. Generally, most
perpetrators of street crime are not armed and therefore, devoid of violence. It is, however, true that
the prevalence of street crimes is significantly high with several reports of purse snatching,
pickpocketing, among other petty crime. Instances of armed robbery, muggings and harassments are
rare; however, valuables that are left unattended are stolen on many occasions. During holidays and
summers when many homes are left alone, residential burglaries are common, the trend, however, has
been on the decline. The number of reports regarding opportunistic crimes like purse snatching,
robberies, pickpocketing, home burglaries and car breakings is also on the rise (Detotto and Otranto,
2010, pp. 345).

Empty residences and homes without an alarm or other security precautions (shutters, additional locks
on doors/windows) are more likely to be burglarized. Burglaries of commercial establishments (jewellery
shops, convenience stores, sometimes banks) have also been reported. Armed violence and assaults
against the general public or targeting of foreigners remain uncommon. Incidents linked to organized
crime are a concern. Criminal incidents involving improvised explosive devices, incendiary devices, and
small arms, primarily attributed to organized crime activity, occur infrequently. Online gambling is the
originating cause of many crimes, including loan sharking, threats, blackmail, and even kidnapping, all of
which have occurred in previous years. Sporadic bombings, shootings, and arson have occurred since
2010. These incidents typically involve conflicts between rival organized crime groups and have not been
associated with terrorism. The attacks are usually designed to send a message to the intended recipient
but occasionally also cause injury or fatality. These incidents have normally taken place in the late
evening or early morning hours but may occur at any time. Most of the reported instances of improvised
explosive devices (IEDs) found did not result in an explosion.

Cyprus is a trafficking destination for persons subjected to forced prostitution and labour. The
government-controlled Republic of Cyprus (ROC) is a destination for sex trafficking that occurs in private
apartments and hotels, on the street, and within commercial sex outlets. Domestic labourers,
agricultural workers, and foreign migrants are vulnerable to trafficking for forced labour. In the
unrecognized "Turkish Republic of Northern Cyprus" (TRNC), sex trafficking is a significant problem. In
2017, 351 women, mostly from eastern European countries, worked on "barmaid visas," usually as
prostitutes, in officially sanctioned nightclubs, overseen by a "government" nightclub commission that
denies prostitution is occurring. While prostitution is illegal under TRNC law, a trafficking law does not
exist, and nightclub workers, who live at the clubs, regularly report that their passports are seized and
that they have little freedom of movement.

1.3 The relationship between crime and economic growth

1.3.1 Economic Concerns

Economic conditions have improved since the financial crisis of 2013, although the unemployment rate
exceeds 10%. Economic espionage concerns are on par with other EU countries. Companies should take
care to ensure the confidentiality and integrity of their data by following standard best business
practices, including the use of authorized IT software. The ROC has robust Intellectual Property Rights
(IPR) legislation, including on copyright, allowing the sampling of evidence, and facilitating prosecution
of violators. Merchandise piracy has decreased significantly in recent years, primarily due to aggressive
enforcement by the Department of Customs and the police. The IPR situation in the area administered
by Turkish Cypriots is far worse than in the ROC. IPR legislation is antiquated, and the authorities have
shown little initiative in combating piracy.

1.3.2 Tourism and Crime in Cyprus

Cyprus has only become famous among tourists since its independence in 1960. The increase in tourist
arrivals has been impressive, from 24,000 in 1960 reaching the maximum of 2.696,700 in 2001, with the
revenue being estimated at €2.172,7 million, the maximum value recorded ever (CYSTAT, 2013). Cyprus
tourism, like world tourism, was profoundly affected in the last decade of 2001, by the terrorist attack of
September 11, 2001, and the "bird flu" virus which was spread all over the world mainly during 2007.
Yet, unlike other destinations, Cyprus managed to keep the island safe enough and, consequently, its
tourism at high levels.

Cyprus has traditionally been established as a popular tourist destination mainly for visitors from
Europe. During 2012, many holidaymakers (94,0%) arrived from European countries while 73,4% from
countries of the European Union. The United Kingdom remains the country's most important source of
tourism, making up the most significant share of the entire tourist arrivals. Specifically, in 2012, tourist
arrivals reached 2.464,908, with the British tourists accounting for 38,9%. Russia increases year by year,
reaching 19,2%, while Germany and Greece follow with 5,9% and 5,4% and Sweden with 4,8% (CYSTAT,
2013).

As indicated by Eurostat, the level of crime in Cyprus is among the lowest in Europe (Eurostat, 2013).
Indeed, for a country with a population of 865,900 inhabitants, only 7,973 cases of serious crime were
reported in 2012 (Cyprus Police, 2013). Most of these cases concerned thefts, burglaries and other
offences against property. While the average [1] crime/population ratio in the member states of the
European Union was almost 5,000 severe crime cases per 100,000 people in 2010, the corresponding
ratio in Cyprus was only about 1,000.

Even though comparisons between countries are not consistent since definitions of crime types and
collection methods vary, the differences in these figures are big enough to suggest that on a
comparative level the rate of serious crime in Cyprus can be described as very low. However, several
political and social changes which have occurred in Cyprus during the last decade show an increase in
various types of crime. Specifically, the opening of the crossing points in the UN-patrolled buffer zone
separating the Turkish-occupied northern part of Cyprus from the free areas of the Republic of Cyprus,
known as the "green line", on April 23, 2003, has contributed to increases in crime, since it has
facilitated the movement of offenders from both the Greek-Cypriot and the Turkish-Cypriot
communities. It should be noted in this context that there is no direct cooperation with the occupied
northern part of the island, which is only recognized by Turkey. Thus, the justice system and laws of the
Republic of Cyprus cannot be applied throughout the whole island. Total crime in Cyprus over the last
decade has a slow but continuously increasing trend, starting from 17,741 reported cases in 2003 and
reaching 21,042 cases in 2012 (Cyprus Police, 2013).

Academia attempts to step further by studying which of the determinants of economic growth, crime
has the most significant impact. In empirical research which aimed to find out the reasons of
deceleration of Colombia's economic growth, the retardation of growth started in1980, Cardenas (2007)
observed that physical and human capital accumulation did not affect the decrease of economic
progress and the only cause of it was productivity loss. When exploring further the reasons for
productivity loss, the author observed that this was due to increasing levels of crime, specifically
homicide rates due to increasing drug-trafficking capacity (Cárdenas, 2007).

The author concluded that the increase in the crime rate has a significant negative impact on economic
growth. Another study, conducted by Peri (2004), tests the effects of socio-cultural variables, such as
civic involvement of its citizens and presence of organized crime as revealed by murder rates, on the
economic success of Italian provinces using data from 95 provinces over the period from 1951 to 1991.
The author concludes that civic involvement does not have a clear impact on economic progress, but
crime does have a significant effect on reducing per capita income and employment growth (Peri, 2004).
As mentioned earlier, the costs of crime present an opportunity cost, and Gaibulloev and Sandler (2008)
confirm it by exploring the effect of crime from transnational and domestic terrorism perspective on the
economic progress of 18 Western European countries, using data from 1971 to 2004. They conclude
that terrorism crowds-out growth-enhancing monetary inflows, such as foreign direct investment (FDI),
and in addition to that, it increments growth-neutral government spending which could have otherwise
be used to stimulate the economic growth (Gaibulloev & Sandler, 2008).

Opposite to univocal studies which showed that crime indeed harms economic growth, there are
observations which show a vague relationship between these two factors. Goulas and Zervoyianni
(2012) check the effect of the interaction of crime and macroeconomic uncertainty on economic growth
using a panel of 25 countries over the period 1991 to 2007. The authors conclude that the increasing
levels of crime do not have an independent effect on economic growth under favourable economic
conditions, but are highly significant in bad economic times, i.e. when worsening the economic
conditions. (Goulas & Zervoyianni, 2012). Burnham et al. (2004) examine the link between inner-city
crime patterns and suburban income growth using data on metropolitan areas of 32 US states from
1982 to 1997. Their results show that the bigger the distance from the central city, the lower the
negative effect of crime is, and at a certain point the impact even becomes positive (Burnham et al.,
2004). They conclude that crime has no apparent effect on growth.

Nevertheless, some authors argue that crime does not affect economic growth. Mauro and Carmeci
(2007) explore the associations between crime, measured in homicides, unemployment and long-run
economic growth, using annual data for 19 Italian regions over the period 1963 to 1995. Their
observations show that crime has no significant impact on long-run growth even though it has a
significant negative effect on income levels (Mauro & Carmeci, 2007). Ray et al. (2009) analyze the
relationship between crime and corruption and economic growth using data sets from International
Crime Victim Surveys for both European Union (EU) and non-EU countries over the period 1989-2005.
They conclude that there is no firm evidence of any significant link between crime and growth rates.
However, there has been a lot of growing interest among researchers in establishing the correlation
between economic growth and acquisition crime.

Focusing on burglary as a form of acquisitive crime and economic crime, the downturn of the economy
of Cyprus has resulted in residential burglaries which have now become a common episode among the
people living in Cyprus. Residential places with no or fewer shutters or alarms are more prone to this
kind of crime, and this leads to fear due to insecurity, and as a result, economic growth is usually
affected. Incidents such as the use of improvised explosives various arms as well as the use of incendiary
devices have resulted in various criminal activities as far as acquisitive crime is of concern (Mauro and
Carmeci, 2007, pp. 450).

Furthermore, Cyprus has also been considered as a destination for those people subjected to obligatory
prostitution and involuntary labour that usually takes place in streets, and these are various forms of
crime in relation to acquisitive crime. On the other hand, fraud-related crimes have remained much
lower in Cyprus among other European countries and these results into a positive impact towards
economic growth in Cyprus. Therefore, acquisitive crime has adverse effects on economic growth.
However, change of Gross Domestic Product (GDP), unemployment rate, inflation, poor income, and
wages, as well as currency strength, determines the growth of economy either in a positive way or
negative way and when the indicators of economic growth are poor, the rate of acquisitive crime rises,
and this can be viewed as an effect of economic growth on acquisitive crime (Detotto and Pulina, 2013,
pp. 183).

1.4 Problem statement

There are various aims or goals through which are to be achieved when proposing a dissertation or
research to be carried out, and just the same way, this dissertation paper also focuses on various aims
which are to be achieved. Therefore, the aims of this paper focus at the interactions between the
economy of Cyprus and acquisitive crime, the effects of acquisitive crime towards the economic growth
of Cyprus as well as evaluation of the effects of economic growth on acquisitive crime or crime in
general and finally to determine whether it is acquisitive crime that affects the economic growth of
Cyprus or whether economic growth has more effects on acquisitive crime (Detotto and Otranto, 2010,
pp. 340).

1.5 Research Question

The question that arises is on the correlation between the economic state and acquisitive crime in the
country. Most research done on acquisitive crime does not shed much light on its relationship with the
economy, and this leaves a gap which this paper will delve into to establish the parallel between the
variables.

1.6 Research Hypothesis

Acquisitive crime rates will increase as people get more miserable with economic recession and hence
become more desperate for income.

1.7 Aim

The main aim of the study is to establish the interactions of the economy and acquisitive crime in
Cyprus.

1.8 Objectives

This study purposed to;

To explore the reasons why arrested individuals opted-in acquisitive crime.

To establish the acquisitive crime rates for the period of 2001-2008 from police data banks.

To establish the acquisitive crime rates for the period of 2010-2017 from the Cyprus police data banks.
To analyse and report on the rise of acquisitive crime in relation to the economic recession.

Therefore, the field of acquisitive crime concerning the economic growth of Cyprus embraces
shoplifting, fraud, bribery, financial regulations, as well as burglary. This dissertation paper brings the
study of acquisitive crime into close association with petty crimes as a base for the decline of the
economic growth in the Cyprus at large i.e. it focuses on the proposition of new institutional structure
that will aim at reducing acquisitive crime which will, in turn, leads to or contributes to continuous
growth in the economy (Aghion and Griffith, 2008). Besides, forms of acquisitive crimes such as fraud
and corruption have been viewed as public crimes, where the public does not believe, in the legal
system of Cyprus as capable of bringing the perpetrators or individuals of serious frauds or the most
corrupted individuals effectively into books. This is related to the regulation system of Cyprus (Kofele-
Kale, 2013).

CHAPTER TWO

2.0 Literature

This part mainly focuses on providing the foundation of knowledge on the topic, identification of prior
erudition (knowledge) to prevent the repetition of information as well as giving credit to other
researchers. It also aims in the identification of inconsistencies such as limitations experienced in the
studies/research, gaps as well as addressing the research questions and statements (Booth et al. 2016).
Therefore, there are various articles, books, and other sources that give information related to the
effects of interaction of acquisitive crime and economic growth in Cyprus (Goulas and Zervoyianni, 2013,
pp. 420), economic growth on crime and acquisitive crime on economic growth (Islam, 2014, pp. 677).

Cyprus has been noted to be much safer in comparison to other European countries in terms of crime.
This is because the assailant crimes are relatively lower. However, the country suffers high rates of
acquisitive crime; reported most commonly in rural areas, streets, residential places and commercial
centres. This nature of crime involves neither hostility nor violence but just theft for small gain to
increase one's material possessions (Tesser, 2013, p. 103). It can be revealed from the police data that
acquisitive criminals do not utilize firearms or high degree violence in that sense.

Tourists who visit the country have experienced petty theft cases where they have reportedly lost
purses have been pickpocketed, lost items unintentionally left in open areas or vehicles. Acquisitive
crimes are reported most during holidays and summer season when the country records the most
significant number of tourists. The offenders usually take advantage of the subjects where they utilize
slightest mistakes or negligence caused by them rather than using force to gain material. Assailant and
armed robbery are seldom reported in the country.

The United States of America experienced mortgage crises in 2007-2008 which brought about an
impact on the economy globally (Mallinson, 2005, p.12). This laid a foundation for a series of economic
effects in different countries; Cyprus is one of them. Cyprus experienced a return economic progression
in the year 2009, followed closely by another crisis in 2012-2013. Consequently, the Cypriot economy
shrunk as there was a notable fall in the profitable shipping and tourism sectors. The result was
increased unemployment rates which could be a contributing factor to the increased rates of acquisitive
crimes in the year 2013 and 2014. According to Raftis, offenders gained material from empty residential
areas, stores, shops and banks; much of which was committed during holidays of the years 2013 and
2014 (Raftis, 2014, p. 11).

The Police report ranks games that give false promises of obtaining vast collections upon investing, such
as online gambling games among the main precipitating factors of acquisitive crime (Hannay, 2005, p.
77). Kidnapping, threats, blackmail, and taking unreasonable loans that are almost impossible to pay
back among others can be related to acquisitive crime. Sharing of the materials obtained from the acts
of crime has proved to be a significant setback among the gangs involved in these crimes; Cases have
been reported of the crime gang clashes which have often resulted in attacks amongst themselves.
Despite these alarming rises of crime rates, armed violence and hostility against tourists are not
common.

The economic stress experienced by the Cypriots has led to more criminal indulgences which have been
backed up with technology. Individuals have embarked on using technology to carry out cyber-crimes
and learn new ways on how to gain material without necessarily using force or violent means as the
more straightforward the method, the more likely the chances of the offender achieving his/her
purpose unnoticed. Cyber-crime has significantly increased in Cyprus in recent days and companies are
seeking to take precaution and invest in cybersecurity (Yang, 2013, p.99). Online fraud has notably risen
over the years as one offender can reach numerous people and even get help from some individuals
who help circulate the fraud innocently thinking that it constitutes fact. Even as the law presses so hard
on whoever is held responsible for the act, individuals devise new methods of successfully undertaking
fraud, pickpocketing, and other petty crimes without being noticed. The question remains that, what
really motivates the perpetrators of acquisitive crimes? The most available answer is to be able to
survive and earn a living.

Just as they are known for utilizing opportunities, acquisitive criminals have majored on the advantage
that Cyprus law does not address the crime of human trafficking. Bartenders forced prostitutes, and
commercial sex workers have increased because human trafficking has been done involving women
(Dixon, Fullerton, & Robertson, 2013, p. 1053). Offenders notice the slightest opportunity to the
individual or government slackness and turn it into a fortune. Many types of research have been done
concerning the precipitating factors of crime, but this will delve into the aftermath of the economic
recession in Cyprus and try to establish its relationship with the rise in acquisitive crime cases since then.

2.1 Economic costs of crime

The economic losses due to criminal activities have captured much attention from academia. Anderson
(1999) attempts to evaluate the aggregate burden of crime, which is the total annual cost of criminal
behaviour in the US. The values are adjusted to correspond with the Consumer Price Index of the year
1997. Andersons' study aims to give an insight upon the aggregate costs, which stretch beyond tangible
costs and include the intangible ones such as opportunity costs. The author concludes that the
approximated value of tangible economic losses is 603 billion US dollars (Anderson, 1999). Besides,
these costs generate an excess of another 1,102 billion US dollars in economic losses due to lost
productivity, crime-related expenses and diminished quality of life (Anderson, 1999). In total, the
aggregate burden of crime is 1,705 billion US dollars. Compared to other numbers such as insurance
purchases which account for 1,680 billion US dollars, the outstanding mortgage debt to commercial
banks and savings institution which account for 1,853 billion US dollars and annual health expenditures
which account for 1,038 billion US dollars, the costs of crime represent a very high share of the total
costs incurred by the US economy (Anderson, 1999).

A further step was made by McCollister et al. (2010) who measure the tangible and intangible economic
losses per criminal offence. The authors mention a considerable number of studies that were done in
order to develop crime-costing methods which try to measure those costs. In their paper, they perform
calculations in order to evaluate the per-offence tangible and intangible costs, as well as total per-
offence costs. They conclude that the average costs of a murder are 8,982,907 US dollars, of a
rape/sexual assault are 240,776 US dollars, of robbery are 42,310 US dollars, of a household burglary are
6462 US dollars and of stolen property are 7974 US dollars, values converted for the year 2008
(McCollister et al., 2010). Therefore, crime has a significant negative impact on the economy, generating
tangible and intangible costs to society at different levels of individual and national level. The amount of
money lost due crime presents a tremendous economic loss to an economy, which otherwise could have
been used in other perspectives. As earlier mentioned, the opportunity cost of crime, the benefit one
could have obtained by taking an alternative action, is an investment which could have yielded better
returns, thus it seems reasonable to assume that crime has a negative impact on the economic growth
of a country and that the study of this issue is of a great importance.

2.2 Determinants of economic growth

Positive economic growth is imperative for the development of a country. Therefore, the determinant
factors of it must be stressed. The first theory to stress the role of determinants for economic growth,
which is also the fundamental one, was Solow's growth model (Solow, 1956). It emphasizes the role of
capital stock, which is the summation of previous investments into machines and buildings, in the short-
run economic growth. It manages to deepen the apprehension of economic growth partially because it
regards the technological progress as exogenous to the economic model. This model predicts that, due
to convergence in growth rates, weak economies grow faster compared to the rich ones. As
technological progress was the main reason why the Solow growth model is only partially explained, it
would be proper to analyze its role in economic growth. Technological change is a consequence of a
conscious investment undertaken by agents seeking to maximize their profits.

The first to develop the theory of "Creative destruction" was Schumpeter (Library of Economics and
Liberty, 2008). He argued that innovation causes old technology, skills, ideas, and equipment to become
obsolete and by this, it grounds further improvement in technology and continuous progress (Library of
Economics and Liberty, 2008). The next to elaborate on Schumpeter's idea were Aghion and Howitt
(Aghion & Howitt, 1992), which combined the ideas of creative destruction and the patent race. A
patent race, according to Jensen (2009), is a competition which involves multiple inventors, usually
companies, who compete to discover an innovation first and then patent it in order to secure it from
imitation. They conclude that firms are motivated to innovate because they expect to have abnormal
profits due to becoming monopolies. The chance of consequent innovation to be discovered
discourages present research due to the potential loss of profits created by current innovation (Aghion
& Howitt, 1992). Nevertheless, it is argued that competition results in companies over-investing in
research (Jensen, 2009) which results in greater use of technology that enables the development of new
and superior processes and products and faster acceleration of economic progress.

The stock of human capital is regarded as crucial to economic growth and the first to mention this was
Mincer (1981). In his paper, the author showed that the acquired abilities of individuals are the ones
which have an impact on economic growth. Together with the increase in the physical capital, they
create the framework of the aggregate production function and yield higher economic growth (Mincer,
1981). Accumulation of individual human capital which refers to worker's acquisition of knowledge by
acquiring skills and know-how through education and training (Mincer, 1981) generates personal
economic growth. The aggregation of personal human capital on a national level yields the growth of an
economy. The bigger the number of contributors, the higher the growth is. The author concluded that
the relationship between the growth of human capital and the economic growth is interrelated, the
stock of human capital being a condition and a consequence of economic growth (Mincer, 1981).

Foreign direct investment (FDI) is a source of technology transfer between two countries, which adds
relatively more to economic growth. Therefore, this determinant is important as well (Borensztein et al.,
1998) However it is highly dependent on assimilation potential of the human capital of the economy
which receives the inflows of FDI (Borensztein et al., 1998; Lensink & Hermesa, 2003).

Openness to trade is another critical determinant of economic growth. It is measured by dividing the
sum of imports and exports of goods and services to GDP and impacts on economic growth by increasing
the competitive advantage. The industries develop attributes that help them to distinguish themselves
and surpass competitors. Companies in the meanwhile are motivated to become more competitive
within the industries. Moreover, trade enhances the transfer of knowledge and technology. Also, by
opening the economy to the external world, it helps to increase the economies of scale. Kraay and Dollar
(2004) analyze the relationship between openness to trade and economic growth and conclude that
developing countries benefit the most from opening their economies to the external world, by having an
increase in GDP per capita2 growth of 5.0 %. Consequently, developed countries had an increase of 2.2%
and countries which were closed to trade had an increase of only 1.4% (Kraay & Dollar, 2004).

Political stability has been proven to be an essential component leading to economic growth. The
lower the political stability, the higher the uncertainty is which in turn causes deterrence of investments.
In the end, it results in a hampered economic growth. Lensink et al. (1999) provide some empirical
evidence on the political environment having a great significance in economic growth. In their study,
conclude that credibility of governments enhances the economic progress by diminishing uncertainty,
moreover the implementation of policies which stabilize trade aid to the creation of a more significant
economic growth (Lensink et al., 1999).

2.3 Effects of acquisitive crime on economic growth in Cyprus

To focus on the effects of acquisitive crime on the economic growth of Cyprus, Ciccone and Jarociński,
2010, pp. 222, gives precise information related to the determinants of economic growth, where
acquisitive crime is viewed as to affect the determinants of economic growth; hence, this dissertation
paper reveals acquisitive crime as a cause rather than as a consequence of the economic growth in most
of the situations. McCollister et al., 2010, pp. 99 also reveal that crime, in general, has developed an
impending negative effect on human as well as capital stock within the society which are the critical
determinants of economic growth of a country such as Cyprus. The effects of the crime on economic
growth determinants result in a decrease in substantial and impalpable welfare in society. Through this,
the economic growth of a country is usually brought down due to excessive factors concerning the
acquisitive crime that takes place within the country (Detotto and Otranto, 2010, pp. 330).

As usually known, any change within the economy of a country depends heavily on human and capital
stock (Aghion and Griffith, 2008), therefore the effects of acquisitive crime is first experienced by
humans (who are also the causative agents of crime), and then the effect is seen on the economic
growth of a country, and the effect is considered to be an aggregate effect. Besides, acquisitive crime
affects economic growth through by showing its negative impacts on the openness to trade (Detotto
and Pulina, 2013, pp. 200). However, the government has developed various strategies with human
capital that ensures acquisitive crime has less effect on the nature of the trade (Sampson et al., 2010,
pp. 49). For instance, seeking those countries where they can send their trading agents to ensure the
trading centre is friendly to the business. Also, high rate of acquisitive crime in openness to trade may
lead to production or generation of price mark-up which hinders the growth of the economy at large
(Deller et al., 2010, pp. 240).

Acquisitive crime is also viewed to affect political stability, one of the economic growth determinants
(Lee and Hong, 2010). When there are high acquisitive crime rates, people are much more concerned on
their safety and may need the government to be very sensitive in this matter that in case the
government fails to address the issue, political instability arises because, citizens do lose moral and may
demand other governance (Rivera‐Batiz, 2002). As a result of political instability, economic growth of a
country like Cyprus goes down, and this may lead to the economic crisis which is just as a result of the
acquisitive crime (Mauro and Carmeci, 2007, pp. 450).

2.4 Crime prevalence in the Republic of Cyprus

One main concern for many policymakers, when evaluating a country's development, is the crime rate.
In recent years, many practitioners and researchers try to appraise the impacts from a broader range of
socio-economic factors. The phenomenon though is unexpectedly compound and multifaceted as the
conclusions do not always concur, whereas in some cases conflicting findings or speculations have been
reported. Moreover, the factors recognized in each study vary depending on the case under study,
concluding that they have disparate impacts in different countries, while in some it is not possible to
reach conclusions as there is not enough evidence.

A large amount of the research concerning crime rates refers to the United States, as in the 1970s the
levels of crime in the United States were much higher than elsewhere (Buonanno et al. 2011). Their
analysis though pointed out that since then, the levels of crime in Europe increased to even higher
levels. In their study, it was recognized that the primary factors impacting crime trends were the rates
and figures on demography, immigration, unemployment, abortion, and incarceration.

As identified by many studies, age, gender, and race are determinants of a potential offender's profile
(South and Messner 2000, Blumstein and Wallman 2006, Hartnagel 2009). The rise or decline of the
rates of several types of crime is highly related to demographic characteristics (Steffensmeier et al.
1989). It is pointed out that ageing populations are less likely to be involved in criminal acts. As
explained by Steffensmeier and Harer (1991), the fluctuation of crime in the United States during the
late 20th century is highly related to the changing age composition of the American and Canadian
populations. As far as race is concerned, Sampson and Lauritsen (1997) have related homicides in the
United States with race and the changes in racial composition. An examination of the relationship
between socio-economic misfortunes and crime with a focus on violent crime by African Americans
suggested that an analysis considering cultural factors will be beneficial in explaining crime trends
(Latzer 2018). There is also an acknowledgement that the mechanisms underlying the development of
offending may differ depending on ethnic or cultural backgrounds (Piquero et al. 2015, Jolliffe et al.
2016).

Apart from demographical changes, other factors and variables should be considered in evaluating
crime (Fox and Piquero 2003). LaFree (1999) recognised that issues like economic stress, family and
lifestyle changes, drugs, policing initiatives, incarceration, education and welfare affect the
opportunities for crime. Fazel et al. (2015) have demonstrated that depression is positively related to
delinquency, while Jolliffe et al. (2018) concluded that depression and anxiety were outcomes of
offending. An extensive amount of research pointed out the association between mental health
problems and delinquency (Hein et al. 2017, McCormick et al. 2017). As mentioned by Joyce (2018),
there is no single explanation of why people commit a crime. Beyond the main psychological, biological
and sociological explanations pointed out, elements of historical and political analysis should be
considered.

Several other reports explore and focus their analysis on the interaction of economic factors with
specific types of crime. It is believed that opportunities for organized crime may increase due to the
economic crisis, whereas cybercrime is also expected to rise during the economic recession (ICPC 2010).
An increase in unemployment could also have significant implications for increasing criminalization. A
small but statistically significant relationship was identified between unemployment rates and property
crime (Donohue and Levitt 2001, Raphael and Winter-Ebmer 2001). It is identified that crime is higher in
areas with low-income earners. As analyzed by Merlo (2003), the inequality in wages is positively
correlated to the crime rate.

CHAPTER THREE

3.0 Methodology

Research Strategy

The study adopter a secondary analysis strategy. The secondary analysis involves the use of existing
data, gathered purposely for previous research to pursue a research interest different from the original
work. It may be a new dimension of view of the original research questioner or a new research question.
According to (Johnstone, 2017), a secondary analysis may adopt a mixed data set of both qualitative and
quantitative or a single data set of only one type of data set. This study adopted a mixed-method
secondary analysis. The researcher chose this method due to the limited opportunities present for
primary research, the time constraints and the high-cost implications of conducting primary research.

As identified in the literature review, the reliability of official crime statistics and the factors influencing
criminal acts may be questioned (Buonanno et al. 2014), while the willingness of victims to report crime,
the administrative procedures, the changes in the recording practices and definitions may also account
for the unstable tendencies of crime rates (Cook and Khmilevska 2005). However, a cautious approach
through descriptive and inferential examination has been accepted by many researchers in this field
(Aebi 2004, Dills et al. 2008, Goldberger and Rosenfeld 2009).

This study, therefore, attempts to add and fill in the gaps to the current crime literature by examining
the effect of crime on economic growth. The study endeavoured to include a broad set of determinants
of growth. It analyses the impact of crime on economic growth and considers openness to trade, foreign
direct investment and political environment. After controlling the study variable, which typically includes
in growth regressions, the model used will try to answer the following research question: What is the
effect of crime on economic growth?

Data sources and Data collection

The data used in this research is going to be retrieved from the following databases: Eurostat,
UNCTADSTAT, World Bank and other relevant online sources. Crime data represents any illegal activity
crime recorded by the police, which includes homicide, violent crime, robbery and domestic burglary.
The rest of the variables are as described. All the data will be collected for countries from the European
Union for a 9-year period from 2004 to 2012, which is the latest available period. To find the effect of
crime on economic growth, the researcher will first check whether crime correlates with other control
variables, such as openness to trade.

Data analysis

The researcher considered the following aspects during data analysis; data was checked thoroughly to
establish their association with the study question. The researcher then interpreted the data for a better
understanding. A cross-analysis of the data was performed after which the researcher made judgements
and recommendations upon the results drawing conclusions based on the research findings.

Ethical consideration

The study considered the following ethical consideration during the study.

The researcher ensured that the collected Data was compatible with secondary analysis. The researcher,
therefore, established the extent of missing data as well as the quality of the original data.

The researcher established the position of the secondary analyst regarding the subject of the study. This
was checked through a check of the results of the secondary analyst. Whenever it was possible, the
researcher sought access to the field notes or tapes that contained the original data.

The study also endeavoured to establish the way consent was obtained in the original study, given the
sensitivity of our study. The researcher, therefore, did not presume the informed consent.

The researcher ensured to report the original study outline, the procedure for data collection,
categorisation and summarization of data strategies as well as ethical and methodical.
CHAPTER FOUR

4.0 Findings and Analysis

Considering that the population of Cyprus in 2013 was 858,000 (CYSTAT 2015) and only 7,089 cases of
serious crime were reported, it can be suggested that criminality in Cyprus is kept at low levels. Most of
the criminal acts and behaviours concern mainly offences against property such as thefts and burglaries
(Cyprus Police 2015). Indeed, according to ESB statistics (Aebi et al. 2014), while the mean number of
offences per 100,000 inhabitants among 35 countries of Europe in 2011 was 4,513, the corresponding
value in the case of Cyprus was only 1,003. Even though it is unsafe to rely on comparisons across
countries fully, as the definitions of legal concepts differ and the recording and presenting methods
vary, the difference in these values is big enough to conclude that on a comparative level the rate of
crime in Cyprus can be described as low.

As seen in Figure 1, the total number of criminal offences recorded by the police in Cyprus between
2003 and 2013 (Mean=19,550, SD=1576), indicates a slow but steadily increasing trend, starting from
17,741 recorded cases in 2003 and reaching the maximum of 22,758 cases in 2011, followed by a
sudden decrease to 17,893 cases in 2013. Also supported by Tavares and Thomas (2009) in a report of
Eurostat, there seems to have been an increase in crime between 2002 and 2008 in Portugal, Slovenia,
Italy, Spain and Cyprus, opposing the downward general national trend in most countries in the EU after
2002. Additionally, according to ESB statistics (Aebi et al. 2014), while the rate of crime in 20 countries in
Europe has decreased from 2007 to 2011, the rate in Cyprus is among those 13 countries that have
increased. As accepted by Gruszczyńska and Heiskanen (2012), crime trends are different in various
areas.

Observing the trends of severe and minor crime in Cyprus (Figure 1) separately, it can be identified that
the increasing trend in total crime results mainly from the upward trend in minor crime. This is
explained by the fact that minor crime accounts for approximately 60% of the total crime. In the case of
minor crimes (Mean=11,920, SD=1218), increased from 10,460 cases in 2003 up to the maximum of
14,332 cases in 2011, followed by a sudden decrease to 10,804 cases in 2013. Serious crime, which is
kept at a lower level (Mean=7629) seems to be more stable, with less noticeable fluctuations along the
same period (SD=486).

This is also verified by the coefficient of variation (CV). The CV for the severe crime it is estimated to be
6.4%, much lower than that of minor crime with 10.2%. The peak was again recorded in 2011 with 8426
cases. According to this result, it can be stated that the year 2011 was the one with the highest
criminality rate in Cyprus. Evidence of this increase is as well the fact that the prison population (at 1
September) doubled from 355 in 2003 to 694 in 2012 (Eurostat 2014), consistent with the argument that
a higher criminality rate leads to a higher rate of imprisonment (Mauer 2003).

Figure 1. Police Recorded Offences for the Period 2003-2013

Source: Mauer 2003

As this study tries to evaluate and identify the possible factors which are believed to play an essential
role for the fluctuation in various types of crime, the several socio-political and economic changes which
have occurred in Cyprus during the last decade are examined in the following subsections.

4.1 Opening of the Crossing Points

First, in chronological order, is the opening on 23 April 2003 of the crossing points in the UN-patrolled
buffer zone separating the Turkish-occupied northern part of Cyprus from the free areas of the Republic
of Cyprus, known as the "green line" and the potential movement of people throughout the whole
island? Even though all Cypriots belong to the European Union family, its laws as well the laws of the
Republic of Cyprus cannot be implemented in the occupied northern areas of Cyprus, as Turkey only
recognizes this part. That is why both Greek Cypriot and Turkish-Cypriot victimizers and serious crime
offenders such as murderers and rapists make full use and benefit from this situation by finding a place
to hide in the occupied northern part of the island, thus escaping from justice. The increasing figures in
the police statistics are related to this fact.

Moreover, various cases and media articles also support this. For instance, the persons arrested in the
occupied northern areas for the triple murder on a highway in the free areas of the Republic of Cyprus
on January 15, 2005, were not sent to custody but released and let free in both Turkey and the northern
occupied areas of Cyprus (Cyprus Mail 2018). Referring to the five Iraqis who in 2008 were severely
injured by a landmine while attempting to cross the "green line", BBC News (2008) revealed: "The five,
including a child, were in a group thought to have been smuggled to the island to claim political asylum".

As a result of the opening of the "green line" the smuggling of drugs and illegal substances from the
occupied northern areas to the free areas of the Republic of Cyprus also became more manageable.
Likewise, the number of reported cases related to drug offences (Mean=768, SD=191) increased from
475 cases in 2003 to 1001 cases in 2013, with the peak being recorded in 2012 with 1032 cases (Figure
2). Despite the strict and hard punishments for drug-related offences, including those of importation
and sale, the number of drug substances seized by officials such as cannabis, cocaine and heroin keeps
increasing.

Figure 2. Police Recorded Drug Offences for the Period 2003-2013

Source: Mauer 2003

4.2 Global Economic Crisis

As of 1990, Cyprus has experienced large scale immigration, mainly due to the increment of labour
opportunities (Gregoriou et al. 2010). Despite the benefits gained from migrant workers and the
increasing trend of moving across international borders, the impact of migration on safety and crime has
been of huge concern. Specifically, the number of illegal immigrants arriving from the occupied northern
area is a phenomenon that troubles the country's society in general. Albeit the decrease in the
observable rates, especially from 2009 onwards, indicating a drop in the number of immigrants
relocating into Cyprus for employment (See figure 3). The significant change in figures before and after
2009, resulted in SD value (1,157) higher than the mean value (1,012). The overall drop in the trend line
could be attributed to the global economic crisis that witnessed in 2009, resulting in a rapid increase of
the unemployment figures from 21,000 in 2009 to 69,000 by the end of 2013 and hence the high rate of
unemployment (CYSTAT 2016).

Figure 3. Number of Illegal Immigrants from the Northern Occupied Area Applying for Asylum for the
Period 2003-2013

Source: Mauer 2003

The global economic crisis with the consequences mentioned above on migration and unemployment
patterns, as witnessed in 2009, could also be among the leading causes for the fluctuation in several
types of crime (Figure 4). For this, the absolute values and trend lines of the most common serious
offences are examined. Specifically, the crimes of burglaries and housebreakings, thefts of items with a
value of more than € 1000 and forgeries are considered.
Figure 4. The tendency for the Most Frequent Serious Offences for the Period 2003-2013

Source: Mauer 2003

Concerning the most frequent severe offences in Cyprus, which are burglaries and housebreakings
(Mean=2,941, SD=312), as well as thefts of items with a value of more than €1,000 (Mean=1450,
SD=206), these incidents peaked after 2009 reaching the maximum in 2011 with 3,379 and 1,687 cases
respectively. In both cases, these recorded values in 2011 are approximately 15% higher than their
mean values. Differently, for forgeries (Mean=904, SD=278), there is a gradual fall from 1,308 cases in
2004 to 374 in 2013. A comparison of the trend lines and dispersion among the three above mentioned
severe offences, it is found that the highest variability is in forgeries with a CV of 30.8%, compared to
14.2% for thefts and 10.6% for burglaries and housebreakings.

As for other equally important, but less frequently committed severe crimes, like robberies, an upward
shift is also reported, from 69 cases in 2003 to 149 in 2013, recording an increase of 116% (Cyprus Police
2015). For homicides, the variation in the pattern throughout the years is high and unstable, ranging
from 7 to 19 murders per year.

Figure 5. The tendency for the Most Frequent Minor Offences for the Period 2003-2013

Source: Mauer 2003

Concerning minor crime and the most frequently committed offences like those involving property like
theft (value up to €1,000) and offences against public in general like "common nuisance, idle and
disorderly persons", no interaction has been identified with the factor of the global economic crisis,
even though there is a steady decrease. Accurately, for thefts (value up to €1,000), the maximum was
recorded in 2004 with 3102 cases, followed by a gradual decrease reaching the minimum in 2013 with
1035 cases. The overall period registered the following statistics; mean of thefts 2135 with a Standard
Deviation (SD) of 623 and a CV of 29.2%. As for "common nuisance, idle and disorderly persons", the
pattern is unstable. The evolution recorded in the period 2006-2008 was followed by a temporary drop
to 2112 cases in 2009, increased again to 2782 cases in 2012 and declined again to 2106 cases in 2013.
These frequent fluctuations resulted in a very high CV of 67.1% (Mean=1232, SD=826). On the other
hand, assault cases causing bodily harm is unchanged in the years before 2009 with no significant
variations, followed by a steady decrease to 572 cases in 2013. As a result, the CV for assaults is
estimated to be 15.5%, which is much lower than that of thefts (value up to €1,000) and "common
nuisance, idle and disorderly persons".
As also identified in the ESB (Aebi et al. 2014), a trend in recorded crime is not the same among the
several types of offences. Despite the failure of relating the trends of all types of minor crime to the
economic crisis in Cyprus, the detailed examination pointed out another factor, namely the
"Introduction of new laws" as described below.

4.3 Introduction of New Laws

As also suggested by Clark (2013) in a Eurostat report, the change in the frequency of committed
offences could be affected by new policing strategies or changes in the methodology. Similarly, in
Cyprus, the main reason of the increase in minor crime over the last decade seems to be the induction
of new offences based on the initiation of recent laws, together with the organized campaigns and
intensive efforts by the police for implementing these laws. Specifically, as seen in Figure 5, the
amendment of the Law for smoking in 2010, for preventing smoking in public places (restaurants, clubs
among others) has more than doubled the recorded cases from 455 in 2009 to 1027 in 2010. Similar is
the case with the introduction of the Law for "using instruments that enhance the sound without
authorization or in breach of permit conditions", with 1689 cases being reported in 2011, 2,087 cases in
2012 and 1,676 cases in 2013.

4.4 Accession of Cyprus in the European Union

Cyprus suffered massive population shifts following the accession in the EU in 2004 and the movement
of EU residents across EU countries, together with the phenomenon of immigration (legal or not). This
has contributed not only to the reclassification of the population of the island but also of crime as well.
Consistent with the survey analysis in Switzerland (Eisner and Killias 2004), the ethnic composition of
offenders considerably shifting.

Based on the cases recorded and detected by the police, as seen in Figure 6, it is evident that the
involvement of non-Cypriot citizens in crime is continuously rising.

Figure 6. Involvement of Cypriot and non-Cypriot Citizens in Total Crime for the Period 2003-2013

Source: Mauer 2003

In 2003, non-Cypriots counted for 14% of the total detected cases were reaching 27% in 2013. The
maximum proportion (31%) was recorded in 2010. Moreover, in 2010, the maximum percentage of
aliens among the offenders in the EU countries was recorded in Cyprus (Aebi et al. 2014). At the same
time, the proportion of Cypriot citizens continued to decrease from 83% in 2003 to 66% in 2013. The
proportion of cases in which both Cypriots and non-Cypriots were involved ranges at lower levels, from
3% to 9%. Additionally, due to the free movement across EU countries, few itinerant criminal groups
claiming to be tourists were discovered while committing crimes against property like thefts (Kokkinos
and Kapardis 2015). As also discussed by Brunt et al. (2000), in some cases, the purpose of travelling is
unrelated to holidays.

CHAPTER FIVE

5.0 Conclusions and Recommendations

 The phenomenon of crime is characterized by perplexity and complexity and is thus difficult to measure
due to its secretive nature and the long-lasting procedures needed for reporting and investigating crime
and bringing an offender before the criminal courts. Recorded crime in Cyprus kept increasing until
reaching a peak in 2011, with rising drug and property offences as well as several ‘minor' offences. Even
though organized crime cannot yet be identified in Cyprus, there is evidence for a link with organized
groups outside the country. This, together with the demographic changes of the island's population,
could be considered as a warning for a change of Cyprus' small, closed and traditional society to a bigger
and more multicultural one. The small size of Cyprus, though, was a challenge for this study, as it is
identified that for analyzing such small populations extra caution should be given since they are
vulnerable to minor changes (Aebi and Linde 2010). Still, the methodology used and the overall
agreement between the data presented in this study with the data from the various other sources have
ensured the quality and reliability of this research work.

Considering that crime nowadays emerges in more complicated and advanced forms, the absence of
specialized studies in the area of crime for the case of Cyprus, together with the absence of any local
estimates of the size of the dark figure of crime, in general, is a weakness in the mission of crime
prevention. Hence, there is an urgent request for more research work in this field in order to prevent
and reduce crime. A key challenge for policymakers is the active investigation and measure of crime
trends and evaluation of the major driving factors.

Apart from the global economic crisis in 2009 and the negative impacts on the country's economic
status, some other political and social changes have been identified and described in this report as the
leading causes of the trends in crime in Cyprus; namely the opening of the "green line" in 2003, the
accession of Cyprus into the EU in 2004 and the initiation of new laws. These events were included and
approached without implying that these are the only ones that affected crime trends. The limitations
under which the phenomenon was studied were well acknowledged and reported prior to the findings.

The empirical work of this study is believed to initialize more investigations and research with further
results, by considering other relevant determinants or extensions of the problem understudies, such as
the degree by which each identified factor drives and impacts patterns of crime. It is a great benefit for
decision-makers to recognize which factors cause crime and the level at which they are interacted, in
order to know how to alter better policies and action plans for mitigating crime determinants and
decreasing crime rates.

In this paper, crime is studied as a cause and not a consequence of economic growth. Therefore, the
decision to investigate the factors mentioned above was taken due that they might be influenced by
crime and less the other way around. Crime has an impending negative effect on human and capital
stock, which are the crucial economic determinants because it decreases both the tangible and
intangible welfare of individuals and the societies (Anderson, 1999; McCollister et al., 2010).

Opposite to the previous factors, economic determinants such as welfare inequality, institutions which
influence the economic performance, socio-cultural factors, geographic location and the demographic
trends tend to have an influence on crime. Poverty arises due to income inequality, thus induces the
crime rates to grow. Institutions which are not competent or tend to tolerate corruption, fail to govern
correctly and stimulate the crime rates to rise. Socio-cultural factors are deeply rooted in a nation's
culture; therefore, crime might be a consequence of culture and less the other way around. Geographic
location and demographic trends might also affect crime due to migration, age distribution and
population density. The study of determinants which affect crime is beyond the scope of this thesis. By
analysing the correct factors, an objective answer to how does crime affect the economic growth will be
given.

The study has revealed that the determinants of crime play differently in different countries. Thus, the
results of this project work cannot wholly be applied to other countries, while also some of the
identified factors and events took place only in Cyprus. It is also pointed out that these factors
recognized were evolved from the analysis only of the period under examination, namely 2003-2013.
Other aspects and potential causes that are linked to delinquent behaviours should be considered to
explain the reasoning criminal. According to Scott (2014), the assumption that rewards and punishments
influence our choices of behaviour underlies economic, sociological, psychological, and legal thinking
about human action.

Most of the researches and reports in Cyprus have so far been restricted to presenting only crime
trends. The study, therefore, which identified causes and factors, is an innovating report for the
country's police and criminal justice system. The findings of this study provide extra information in
understanding crime levels, predicting crime rates and supporting policing practices. Resources and
coordinated efforts against crime can better be allocated and aimed at crimes. The researcher,
therefore, believed that they further add to results and help to answer questions in the criminology
area, not only for the case of Cyprus but worldwide, as crime has no boundaries and cannot be
restricted within one area only.

Regardless of the increasing crime trend observed in the period under examination, it is pointed out
that Cyprus' criminality rate is among the lowest in EU, indicating that Cyprus is still a safe place to live
in. Moreover, the decline of crime-related figures in 2012 and 2013 is promising for the future.

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