Economic and Financial Crime: Theoretical and Methodological Approaches

Abstract

This first chapter begins to present the concepts of economic and financial crimes and theirs main components of corruption, shadow economy, and money laundering. The historical issues, concepts, and characteristic features (volume, intensity, direction, and frequency) are presented in relation with the economic and financial crime acts. Then, this first chapter reveals the way to measure these types of crime, presenting the most known tools to measure corruption, shadow economy, and money laundering, along with assessing an economic and financial crime index. For each tool, the main data sources are provided. This chapter also includes practical approaches, referring to descriptive studies of corruption, money laundering and shadow economy in European Union countries. The relation between corruption, shadow economy, and money laundering is also theoretically and empirically investigated.This chapter ends with the highlighting of the main determinants of economic and financial crime at micro level (corporate governance including also the quality of financial audit and reporting) and macro level: economic factors (economic development, tax pressure, financial and banking system development, technical and scientific revolutions, technology, digital economy); political and legal factors (public governance, reflected by the efficiency of institutions, quality of regulations, rule of law etc.); and sociocultural factors (attitude regarding the taxes or tax morale, culture, religion, education including intelligence, confidence). These determinant are detailed in the following two chapters.