God allows evil because it manifests his glory, i.e. what kind of a God would just create beings that were going to love him no matter what. Secondly he allows evil for a greater good. We are brought to a higher level of love for him by his allowing us to do evil and then being willing to forgive us.
Luke 7 is the text to support this:
37] And behold, a woman of the city, who was a sinner, when she learned that he was at table in the Pharisee’s house, brought an alabaster flask of ointment,
38] and standing behind him at his feet, weeping, she began to wet his feet with her tears, and wiped them with the hair of her head, and kissed his feet, and anointed them with the ointment.
39] Now when the Pharisee who had invited him saw it, he said to himself, “If this man were a prophet, he would have known who and what sort of woman this is who is touching him, for she is a sinner.”
40] And Jesus answering said to him, “Simon, I have something to say to you.” And he answered, “What is it, Teacher?”
41] “A certain creditor had two debtors; one owed five hundred denarii, and the other fifty.
42] When they could not pay, he forgave them both. Now which of them will love him more?”
43] Simon answered, “The one, I suppose, to whom he forgave more.” And he said to him, “You have judged rightly.”
44] Then turning toward the woman he said to Simon, “Do you see this woman? I entered your house, you gave me no water for my feet, but she has wet my feet with her tears and wiped them with her hair.
45] You gave me no kiss, but from the time I came in she has not ceased to kiss my feet.
46] You did not anoint my head with oil, but she has anointed my feet with ointment.
47] Therefore I tell you, her sins, which are many, are forgiven, for she loved much; but he who is forgiven little, loves little.”
Also:
The reason that God allowed the fall was to bring a greater good out of it. “O happy fault that merited such and so great a Redeemer!”. (Augustine) Every Mass at Easter the Church repeats these words. Augustine also says “God judged it better to bring good out of evil than to suffer no evil to exist”. This is apparent from scripture if you read Romans 5:20 "Where there is sin, grace abounds
Blessings