Regulatory Foresight

Abstract

Illicit markets capitalize on the vulnerabilities of trade systems. When these weaknesses involve mechanisms common to several aspects of transnational commerce, the effect of illicit behavior, and conversely of anti-crime policy, can be magnified. This study introduces a script-network method to estimate the impact of targeting illicit behavior within the context of an entire market system. Using the high-value art and antiquities market as a case study, we anticipate the effects of two anti-crime policy directives—movement control and monitoring financial transactions. In addition to advancing a new method, two original metrics are presented—one measures the complexity of sectors in a trade system ( complexity) and the other anticipates the incentive to work around crime control efforts ( transformity). In consideration of these system characteristics, our results suggest that maximum decoupling of illicit\legal trade is more likely with the introduction of safeguards targeting central trade functions that are associated with valuing and gifting objects. Network-oriented research could help the prevailing market reduction approach (MRA) to be more effective in reducing transnational illicit trade because network analytics are specially crafted for dealing with the statistical challenges that are inherent to studying transnational illicit market systems.