Why crime is a country’s biggest obstacle to economic development?

Answers (2)

It depends on what you mean by crime.
www.youtube.com/watch?v=UQBWGo7pef8

And "why" is a religious topic that takes a while to explain.

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You might enjoy reading the free materials at fee.org - They do make an attempt to explain how government actions are the biggest drag on economic activities. But they still don't try to explain why.

Many people view crime as an acceptable way of getting ahead.
Most people would agree that governments want to eradicate crime. Yet, a retired official noted “The government has done too little toward making the machinery of justice work speedily and efficiently. The police force is understaffed and underequipped. Policemen are sometimes not paid their salaries on time, making it very tempting for them to take bribes.
It is no exaggeration to say that governments are fighting a losing battle against crime. One newspaper commented " Public fear of the increase in crimes of violence is deep-seated and can be put to rest neither by the usual party-political bickering nor by statistics suggesting that the situation is not as bad as it might seem.
Dishonesty in high places may nullify the efforts of honest law-enforcement.
What is happening is just as the Bible long ago foretold: “In the last days critical times hard to deal with will be here.” (2 Timothy 3:1-4)
Yet, there is room for optimism. A crime-free world is drawing ever nearer, and you may live to see it. The time is near for God’s righteous Kingdom government to enter into action against his enemies on earth. These include criminals who deliberately choose crime as a way of life, for “unrighteous persons will not inherit God’s kingdom. Daniel 2:44 and Psalm 37:10,11.
For more information on this subject and others, please go to jw.org "Online Library." Also for free downloads, publications, videos or read online.

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Taxation has a much greater effect on economic development. For instance, so many citizens are abandoning California that they have to rent trailers in some other state and tow them back to CA to pick up their stuff. Other states with heavy taxes are also seeing their populations flee.