Existing empirical studies are typically unable to sort out the direction of causality between poverty and violent crime in less developed countries. This study uses local rainfall variation – which is plausibly exogenous and closely related to income – to estimate the impact of negative income shocks on murder in 67 Tanzanian villages across eleven years. Extreme rainfall leads to a large statistically significant increase in the murder of “witches ” – typically elderly women killed by relatives – but not in other types of murders. The results are consistent with a model in which households near subsistence kill (or expel) relatively unproductive elderly household members to safeguard the nutritional status of other members. The theory is bolstered by the fact that most killings take place in low socio-economic status villages during the so-called “hungry season ” of the year, and most victims are from poor households. The results provide novel evidence on the role of poverty as a cause of violent crime.

A new stylized fact in development economics is the importance of social capital in promoting economic growth. This paper examines the effect of social capital on industrialization in Indonesia. We analyze a rich set of social capital and social interaction measures, including voluntary associational activity and levels of trust and informal cooperation. The main finding is that initial social capital does not predict subsequent industrial development across 274 Indonesian districts. Though these findings are for only a single nation and may not apply everywhere, they call into question recent claims regarding social capital and economic development.