This is a longer, more detailed, and more statistics-laden version of an op ed piece that ran in the Financial Times on Friday. As mysterious as the downward trend in crime may be (and as vexing a challenge as it’s posed to professional explainers), it’s obviously a welcome development—and is very possibly a bellwether of even more positive changes in our society.

Almost three years into the worst economic downturn since the Great Depression, with massive unemployment and pessimism rife, America’s crime rates are falling and no one—not our pundits, policemen, or politicians, our professors or city planners—can tell us why. As I wrote about here, there were 5.5 percent fewer murders, forcible rapes, robberies and aggravated assaults reported in 2010 than in 2009, according to the most recent edition of the FBI’s Uniform Crime Report; property crimes fell by 2.8 percent over the same period and reported arsons dropped by 8.3 percent. And the drop was steepest in America’s biggest cities—which are still popularly believed to be cauldrons of criminality. “While cities and suburbs alike are much safer today than in 1990,” notes a recent report by the Brookings Institution, “central cities—the big cities that make up the hubs of the 100 largest metro areas—benefitted the most from declining crime rates. Among suburban communities, older higher-density suburbs saw crime drop at a faster pace than newer, lower-density emerging and exurban communities on the metropolitan fringe.”

An essay in The Economist featured a graphic which charts the arc of American crime rates since the 1960s. Its caption poses the question that is on everyone’s lips:

Some explanations evoke Sherlock Holmes’ “dog that didn’t bark.” When crime rates first began to fall in the 1990s, Steven Levitt and John Donohue III argued that legalized abortion was responsible, since unwanted children would have been more likely to grow up to be criminals – a finding that was not only wildly controversial but has been met with substantial challenge. Research by economist Jessica Wolpaw Reyes find attributes a significant proportion of the decline in violent crime to children’s reduced exposure to lead.

Others suggest that America’s astronomical incarceration rate—the highest in the world—is responsible, though that begs the question why countries that don’t incarcerate their citizens at anything like the same rate suffer from less crime than the US does. It’s disquieting to think that what would seem to be an unalloyed social good—less crime—might have been brought about in part by what many believe to be a social disaster: America’s draconian, unequally enforced drug laws. Still, law enforcement must be given its due; many big city police departments have developed statistically-driven methodologies for targeting crime hot-spots, with conspicuously successful results. And we as individuals have changed our behavior as well—from taking elementary precautions like locking our doors, to investing in crime-stopping technology like burglar alarms for our homes and LoJack for our cars.

Still, it is confounding that crime would decline as economic conditions worsen. My own analysis, conducted with my Martin Prosperity Institute colleague Charlotta Mellander, turns up no statistical associations between crime and either the level or the change in the level of unemployment across metros, or between crime and the level of income inequality. There does seem to be a modest relationship between the absolute poverty rate and crime. Our analysis turned up an association of .19 between crime and the percent of population below the poverty line. But it has weakened substantially over the past two or three decades, according to the Brookings study.

So too has the relationship between crime and race. From evening news headlines to crime shows on TV, popular culture underlines the propinquity between crime and race Our analysis turned up modest correlation (.37) between crime and the share of population that is black. But again, Brookings Institute report assembles powerful evidence to show that the relationship has been weakening. “The association between crime and community characteristics—like the proportion of the population that is black, Hispanic, poor, or foreign-born—diminished considerably over time,” notes the study. “The strength of the relationship between the share of black residents and property crime decreased by half between 1990 and 2008, while the association between the share of Hispanic residents and violent crime all but disappeared.”

In the popular imagination, crime is frequently associated with big, densely populated cities. Here again, we can separate fact from myth.  Primary cities and older high-density suburbs exhibited the largest decreases in crime between 1990 and 2008, according to the Brookings study. And the gap between city and suburban violent crime narrowed in two-thirds of the nation’s 100 largest metro areas. Our own analysis turns up no association whatsoever between metro size or metro density and the overall level of crime, though we do find a modest correlation (.25) between density and violent crime.

In a thoughtful essay in the Wall Street Journal, the distinguished political scientist and urban crime expert James Q. Wilson hit hard at strictly economistic explanations, suggesting that deeper changes in American culture can better account for the mystery. “The cultural argument” he writes, can help explain not only the current drop in crime, but also “the Great Depression’s fall in crime and the explosion of crime during the sixties. In the first period, on this view, people took self-control seriously; in the second, self-expression—at society’s cost—became more prevalent.” My former Carnegie Mellon University colleague, the distinguished criminologist Alfred Blumstein, proposes an “Obama effect,” in which young black males’ increased optimism about their futures makes them more likely to refrain from violence.

But the key factor, as it turns out, lies in the growing racial, ethnic, and demographic diversity of our cities and metro areas. Our analysis found that the Hispanic share of the population is negatively associated with urban crime. Crime also fell as the percentage of the population that is non-white and the percentage that is gay increased. And of all the variables in our analysis, the one that is most consistently negatively associated with crime is a place’s percentage of foreign-born residents. . Not only did we find a negative correlation (-.36) between foreign-born share and crime in general, the pattern held across all of the many, various types of crime – from murder and arson to burglary and car theft. The Brookings study also finds evidence of a substantial shift in the connection between foreign-born residents and crime. While foreign-born share was positively associated with crime in 1990 and 2000, that relationship had disappeared by 2008. The foreign-born share of population now shows no relationship to property crime, and a negative relationship to violent crime. The pattern is most pronounced for primary cities and inner-ring suburbs, the Brookings study found, but not for lower-density suburbs and ex-urbs.

It might be hard to wrap your mind around this—especially with all the demagoguery about immigration. But the numbers tell a different story than our alarmist pundits and politicians do. “Since 1990, all types of communities within the country’s largest metro areas have become more diverse,” Elizabeth Kneebone, one of the authors of the Brookings report, wrote in The New Republic. “Crime fell fastest in big cities and high-density suburbs that were poorer, more minority, and had higher crime rates to begin with. At the same time, all kinds of suburbs saw their share of poor, minority, and foreign-born residents increase. As suburbia diversified, crime rates fell.” Along with their entrepreneurial energy and their zeal to succeed, immigrants are good neighbors—cultural and economic factors that militate against criminal behavior, and not just in their own enclaves but in surrounding communities as well.

One additional factor bears on this. Our analysis also turns up a consistent negative correlation between crime and the overall level of city happiness. It makes intuitive sense that a low-crime city would be a happy city; still, it’s worth pointing out that the happiness measure (which comes from Gallup surveys) is associated not just with overall crime but with almost every type of crime across the board. This is somewhat striking in an analysis where associations between crime and key social and economic variables are hard to find. More to the point, the Gallup research identifies openness to diversity as being one of the two most important factors that shape city happiness and community satisfaction across the board.

America’s declining crime rates are cause for celebration, even if we can’t completely explain the phenomenon. The fact that diversity appears to play such a signal role in the trend—something that most Americans regard as a moral and economic good in its own right— makes it all-the-more satisfying.

The overall level of world peace world fell for the third year in a row, according to the latest version of the Global Peace Index produced by the Institute for Economics and Peace. Most of this trend was driven by the increased “social and political turmoil in the Middle East and North African Nations during the early part of 2011,” the report notes.

But what are the factors that shape the relative peacefulness of nations?  And, what is the connection between peace – or its opposite – on their economic growth, well-being, and prosperity?

This map charts the Global Peace Index (GPI) scores for 153 countries worldwide. The GPI is based on 25 separate indicators of internal and external conflict, including wars and external conflicts, deaths from external conflicts, militarization, weapons exports, homicides, access to weapons, violent political demonstrations, prison populations, and police presence.

Iceland and New Zealand are the first and second most peaceful countries on the planet according to the GPI, followed by Japan, Denmark, and the Czech Republic. Canada is ranked eighth. Not surprisingly, the U.S. —with the world’s largest military, enmeshed in a seemingly “perpetual war” on terrorism, a large prison population,  high homicide rate, and relatively large domestic police presence —is ranked 82nd, between Gabon (81) and Bangladesh (83). The five least peaceful nations are North Korea, Afghanistan, Sudan, Iraq, and Somalia. War-ravaged Libya fell from 83 to 143.  It’s worth pointing out the considerable differences among the rising BRICs nations.  Two of them have  high GPI scores – Russia (147) and India (135) – and thus rank among the world’s least peaceful nations, while the other two – Brazil (74) and China (80) – rank in the neighborhood of the United States.

I thought it would be interesting to compare countries’ rankings on the GPI to their standings on a number of other economic, social, and demographic factors. With the help of my Martin Prosperity Institute colleague Charlotta Mellander, we ran the numbers and generated a series of scattergraphs, plotting GPI against these other metrics. Our analysis only covers approximately 75-80 countries due to data availability. Also note that the higher the GPI score, the less peaceful a country is. Though we found strong associations between a country’s prosperity and its GPI, we can’t say for certain whether peace promotes prosperity or prosperity promotes peace—or whether other factors that we haven’t considered play an equal or greater role. But the patterns that come up are intriguing enough to report here.

Generally speaking, peace follows the level of economic development.  A large number of affluent, advanced nations – Norway, Canada, Denmark, Japan and New Zealand – are among the most peaceful in the world.  The GPI is strongly associated with the level of economic development (a correlation of -.6—recall that the higher the GPI is, the less peaceful a nation is, hence the negative correlation).  There are also quite a few outliers, Russia, Israel and the United States among them.  Great powers, economically dominant countries like the U.S. today or the UK in the past, have also always developed large militaries. So have their rivals, like the USSR during the Cold War, or France and Germany on the continent during the days when England reigned supreme.

Peace is also a product of the type of development, not just its level.  The apex of economic development has shifted from resource extraction and manufacturing economies, with their large working classes, to more highly-educated and idea-driven post-industrial knowledge economies.

The GPI is closely associated with the share of workers in professional, technical and creative fields  (-.48) and also with human capital (-.45, see also the scatter-graph above). Russia, Israel and Pakistan are extreme outliers.

It almost goes without saying that peaceful countries have higher levels of happiness and well-being. When people don’t have to worry about sending their children off to war, being invaded by enemy armies, or terrorists with suicide bombs, they naturally experience higher levels of life satisfaction.  So it’s not surprising that the two are closely associated statistically, with a correlation of -.52 (once again, remember that a higher GPI score reflects a lower level of peace, hence the negative correlation). The U.S. is again something of an outlier here, situated near Mexico and Saudi Arabia – nations with significantly higher levels of well-being than their GPI scores might predict. Israel, Russia and Pakistan remain the extreme outliers.

And finally for the biggest takeaway:  There is a considerable positive correlation (.42) between the GPI and income inequality (see above).  Nations with less income inequality have higher levels of peace, while inequality is associated with peace’s opposite. Once more, Russia, Israel and Pakistan are the outliers. Central American and South American nations do particularly poorly on this measure—look at Honduras, El Salvador, and Ecuador, far out on the upper right quadrant. This tendency might be even more pronounced had we had the data for some African countries. Countries with strong inequality are often poorer nations with resource-based economies.  Such nations are more likely to be governed by the kinds of authoritarian regimes that are prone to strong man tactics internally and maintain tense relations with neighboring states.

Whether prosperity breeds pacific attitudes or vice versa, there is little doubt that war is not just awful by every humane standard, it’s also a bad economic strategy—and one that, generally speaking, leads to much lower levels of happiness and well-being.

Maclean’s magazine contacted me last month to ask for my comments about a recently released mega-study of “lifelong learning.” The subject of the piece was the 2008 Composite Learning Index (CLI), from the Canadian Council on Learning.

Here’s a link to the Maclean’s article, which has some insightful quotes from CCG’s Kevin Stolarick, and some boring ones from me.

The Maclean’s article is a good overview of the ambitious CLI study, but it’s really worth a look in its raw form. Here is the home page for the Composite Learning Index, and the 2008 report itself.

Your time is valuable, so let me just give you my thoughts about the study, having done many similar ones over the last 25 years or so.

• First, it’s huge in scope - too big, in my opinion, for any valuable insight. By covering so much, it dilutes its results by including sometimes conflicting measures.
• The study attempts to quantify “learning” in large and small cities and towns across Canada, nearly communities in all. In an apparent effort to value everyone everywhere, all types of learning are included such as use of the Internet; recreation and sports participation; buying and reading printed matter; attending live performing arts; travel time to nearby museums, libraries, and business/civic associations; expenditures on social clubs; attending church; volunteering and socializing with other cultures; as well as the more common measures of high school and university graduation rates and student test scores. These are all valuable metrics, and all worthy of their own study. By mashing them all together into one index, some insights are undoubtedly lost.
• Many of the metrics are based on estimates of household expenditures for various metrics. I did not find a list of specific sources, but in my experience household expenditure data is based on a national model, and adjusted for each geographic area, usually on the basis of income. It is unlikely that individual differences between communities are revealed, except as a function of income. Rich places spend more, poor places less.
• Some measure of the quality of the resources should be attempted, not just the proximity to libraries,  schools and universities, museums and art galleries. It’s much different having access to a world-class museum with rotating exhibits, instead of a small-town one-room museum with the usual few bones, muskets, baskets, and pottery (charming though they are.) Use annual attendance figures or budgets to estimate the quality of the experience, or average entrance scores to rank universities.
• There are four major segments of the study, based on the type of learning – Knowing, Work Experience, Community, and Personal Development. These would best remain segregated. It’s appealing to combine them all into one super-score but, like mixing many colors together, insights are lost.

All in all, the CLI is a wonderfully ambitious attempt to quantify “learning” and provide a road map for the future. But a Swiss Army knife is rarely the best tool for the job, or even any job. By dividing the components of the study into more meaningful sections, better insights may be gained.

Have a look and tell me what you think. Do their rankings fit with your experience?

Best, Bert