Black Market Activity Research Articles

Opening a proliferation Pandora's box: the spread of the Soviet-type gas centrifuge

ABSTRACTSome scholars have suggested that illicit state-to-state technology transfer and black-market activities are the primary vectors by which technically weak states acquire nuclear weapons. However, a more recent literature has questioned this view, arguing that natural technological change and public-domain information have been potentially more important enablers of proliferation. Articles supporting this perspective have examined gas centrifuge programs in emerging nuclear powers and failed proliferators. This article examines how viable centrifuge-engineering information first circulated and eventually entered the public domain. It then traces the adoption of this technology in nine latent proliferators: countries that are not known to have pursued nuclear weapons immediately, but which nonetheless became capable of making them. The histories of these programs reinforce the argument that public-domain information and basic technology are adequate for proliferation and cannot be reliably limited by technology controls or secrecy.

La Capitale de la Faim: Black Market Restaurants in Paris, 1940-1944

Black market restaurants thrived in Occupied Paris. German authorities castigated the French for their failure to shut them down, claiming that profiteers consumed luxurious fare in restaurants at the expense of hungry Parisians waiting in marketplace queues. Paris restaurants merit closer attention for the evidence they provide on the conflicts and relative powers in Franco-German “collaboration,” for the glaring inequities in food distribution exemplified by these restaurants that discredited Vichy food management policies, and for the creativity of Parisian restaurant owners in finding methods of alternate supply and service for their clients. The restaurants provide material for a case study to highlight the development of black markets and the frustration of control efforts, the reasons for popular sentiments of injustice in food supply, and the critically important role of German demands in the development of black market activity. Les restaurants parisiens du marché noir ont prospéré pendant l’Occupation. Les Allemands ont fustigé les autorités françaises pour leur incapacité d’arrêter ce commerce, soutenant que les repas luxueux consommés par les trafiquants du marché noir privaient les Parisiens des denrées essentielles. Une étude des restaurants parisiens du marché noir pourrait nous aider à éclaircir la nature des conflits franco-allemands sur le ravitaillement et le pouvoir relatif déterminant la « collaboration », à expliquer l’exacerbation progressive de l’opinion publique contre le régime de Vichy, et à mettre en lumière la créativité des restaurateurs qui trouvaient des méthodes alternatives pour alimenter leur commerce. On y voit aussi l’importance des exigences allemandes qui provoquaient l’étendue des activités du marché noir.

Aggressively Regressive: The 'Sin Taxes' that Make the Poor Poorer

Poorest hit hardest by consumption taxes, new research shows Summary The poorest twenty per cent of households in Britain spend an average of £1,286 per year on ‘sin taxes’, including betting taxes, vehicle excise duty, air passenger duty, ‘green taxes’ and duty on tobacco, alcohol and motor fuels. In addition, they also spend £1,165 on VAT. The £1,286 spent on sin taxes represents 11.4 per cent of the disposable income of Britain’s poorest fifth of households. For every eight pounds spent by the poorest fifth of households, one pound is taken from them in sin taxes. Despite significantly lower rates of alcohol consumption and car ownership, the poorest income group spends twice as much on sin taxes and VAT than the wealthiest income group as a proportion of their income. Tax is the single biggest source of expenditure for those who live in poverty and indirect taxes are a major cause of Britain’s cost of living crisis. The average smoker from the poorest fifth of households spends between 18 and 22 per cent of their disposable income on cigarettes. The tax on these cigarettes consumes 15 to 17 per cent of their income. Motoring taxes absorb eight per cent of the income of a typical driver from the bottom fifth of households. Alcohol taxes consume 2 to 4 per cent of the income of moderate drinkers in the bottom fifth of households. People in the bottom fifth of the income stream who drink moderately, smoke and drive a car spend 37 per cent of their disposable household income on sin taxes and VAT. The comparable figure for people in the top fifth of the income stream is 15 per cent. Halving ‘sin taxes’ on fuel, tobacco and alcohol, scrapping green energy subsidies and returning the rate of VAT to 15 per cent would reduce tax evasion, reduce black market activity, improve labour market flexibility and stimulate the economy. Above all, it would put money back in the pockets of those who are in greatest need of it.

Was the Gulag an Archipelago? De‐Convoyed Prisoners and Porous Borders in the Camps of Western Siberia

This article focuses on the issue of de‐convoyed (raskonvoirovannye) prisoners in order to argue that Aleksandr Solzhenitsyn's enduring analogy for the Gulag—the archipelago—is, in many instances, misleading. The practice of allowing significant numbers of prisoners to move, unguarded, outside of the camp zones was widespread throughout the Stalin era, and is especially interesting as a topic of study for Western Siberia, an area where the largest camp subdivisions were located within the city limits of major urban centers, such as Novosibirsk and Tomsk. This article is the first systematic study of the phenomenon during the Stalin era, and assesses the rules of and reasons for de‐convoyed status, prisoners' thoughts concerning unguarded movement, and problems and opportunities (including black market activity) arising from the widespread presence of unescorted prisoners. Ultimately, the Gulag's porous borders meant that Gulag space was not separate, isolated space, despite the best intentions of the regime.

The Black Market in History and Memory: German Perceptions of Victimhood from 1945 to 1948

Using recent scholarship on memory and German identity formation as a springboard, this article examines the illicit trade that flourished in the immediate postwar period to probe the creation of a community of fate, one that emphasized its victimhood. It explores both contemporary perceptions and the memory of the black market from multiple viewpoints, the occupiers, the Germans and the Displaced Persons (DPs). Rather than treating the illicit trade as solely one activity, it explains its gradations, in terms of what was exchanged, by whom, and the perceived morality of the exchange. This approach highlights the disconnection between ubiquitous participation by Germans in illicit trade and their memories of it as primarily a foreign phenomenon. In other words, Germans saw their trading outside of official channels as necessary and moral, whereas the trade by foreigners, either DPs or occupation troops, was seen as both exploitative and immoral. Given the high visibility of Jews among the DPs, it also provides a window into the continuation of antisemitism in the immediate postwar period. It argues that the conjunction in 1948 of the currency reform, the noticeable drop in black market activity, and the emigration of Jewish DPs have cemented two of the prevailing myths of the postwar period: the economic miracle and Jews as black marketers.

First Black, Now Gray: The Increasingly Difficult Task of International Brand Protection

With the trend towards international outsourcing, and the increased technological sophistication of less developed countries, especially China, international marketers have seen a huge increase in black and gray market activity. This case addresses the increasingly difficulty job of protecting brand ownership against black and gray market activity.

Managing, Learning and Sending

This article investigates the material lives and journeys of eight women who migrated to Britain from Poland during the time of the socialist regime. Although the state created obstructions to emigration, it was viable for women with family overseas to travel to the West as visitors, sometimes turning temporary stays into permanent settlements through marriage. For others, westward travel was made possible by professional employment opportunities. These journeys of migration not only crossed political divides, but also forced a fundamental shift in the material lives of the migrants, transporting them from a shortage economy supported by black market activities to a relatively affluent consumer society. Based on in-depth interviews, this article considers three aspects of the telling of this change in these women's material lives: how they related their material experiences of socialist Poland; how they framed their encounters with their new consumer environment; and how they reconfigured their material relationships with those left behind.

The North Korean standard of living during the famine

For decades, North Korea has been one of the world's most secluded societies. Due to a lack of reliable statistics, little analytical research has been done on the well-being of those who suffer most under totalitarianism: the North Korean people. By considering height data as a sensitive indicator of the North Korean standard of living, we explain what has historically influenced the welfare of children in different regions. Using cross-sectional data from 1997 when the peak of the infamous famine coincided with extreme environmental influences, we primarily test a number of socioeconomic hypotheses that have been proposed in the literature. Of these, the public distribution system and local harvest conditions—which may reflect black and gray market activity—were found as having a positive and statistically significant effect on height outcomes. Furthermore, from a biological point of view, males and older birth cohorts seem to have suffered more during the famine of the 1990s.

Efficient black markets?

This paper investigates analytically the welfare effects of black-market activities that firms undertake to evade taxes. The desirability of a black market is linked to the attributes of the goods supplied by black-market firms. The analysis identifies cases where a black market reduces (increases) the distortionary impact of taxation on the allocation of resources across the goods that the government is attempting to tax, leading to a welfare gain (loss).

The cigarette black market in Germany and in the United Kingdom

PurposeThe research aims at providing a comprehensive assessment of the cigarette black market in Germany and the UK within the framework of the study of organized crime.Design/methodology/approachThe particular approach upon which this paper is based is a systematic, cross‐national review of open sources, including media reports and government documents. The information gleaned from these sources is transferred into a classificatory scheme derived from the analysis of organized crime.FindingsWhile similarities exist regarding the inner workings of the cigarette black market, interesting variations between the two countries emerge, including an asynchronicity of the developmental process and differences in modus operandi. In addition to cross‐national differences, striking regional variations in the prevalence and character of black market activity exist within each country. This leads to the conclusion that a multitude of factors have to be considered to account for the overall dynamics and specific manifestations of the cigarette black market.Research limitations/implicationsIn future research the database needs to be broadened beyond open sources.Practical implicationsPolicy decisions with the aim to curb the cigarette black market have to take the apparent complexity of causal and intervening factors into account. The level of taxation is just one of several factors.Originality/valueNo comparative analysis of the cigarette black markets in Germany and the UK has previously been available.

State Failure, Economic Failure, and Predatory Organized Crime: A Comparative Analysis

Organized crime research has regained momentum in the post-Cold War era, yet the field remains dominated by single-society studies of low generalizability. This study reports findings from comparative analysis of perceptions of predatory organized crime conducted in 59 countries. Two hypotheses of predatory organized crime were evaluated. The state failure hypothesis argues that the failure of the state to deliver key political goods such as security, justice, and stability encourages criminal groups to perform state functions. The economic failure hypothesis holds that poor economic outcomes such as high unemployment, low standards of living, and a reliance on an underground economy stimulates the growth of criminal syndicates as suppliers of demanded goods, services, and jobs. Analytical results provided general support to both hypotheses. Judicial independence and black market activities were the strongest political and economic correlates of predatory organized crime. Policy implications for organized crime control in developing countries are discussed.

Voucher-financed privatisation: lessons from the Armenian experience

This paper delineates lesser-known and arguably less attractive dimensions germane to Armenia's voucher-financed privatisation strategy initiated in the early 1990s. Issues inspected include voucher valuation fluctuations, black-market activity and foreign direct investment implications. As privatisation policy initiatives command modem-day worldwide attention, the historical insights garnered from Armenia's experience as illuminated in this paper have sustained value in yet a more contemporary setting. As to whether or not Armenia's voucher-financed privatisation scheme as implemented by the Government of the Republic of Armenia was successful, the jury, in many respects, is still out.

Political Freedom, Economic Liberty, and Prosperity

Across the countries of the world, annual GNI/capita varies by a factor of almost 100, from $440 in Sierra Leone to $41,230 in Luxembourg (in 1999.) Past literature has often associated country wealth with culture, geography, history and religion, but nothing can be done about such influences over a short horizon, and probably little can be done over generations. We seek instead to uncover the "deep" determinants of wealth; i.e., those macroeconomic, structural, political and in stitutional conditions realistically amenable to change. We find surprisingly good news; more than 80 percent of the international variation in GNI/capita can be explained by mutable determinants. Fourteen candidate determinants are examined over five recent years (1995-99 inclusive) utilizing a principal components approach to minimize the effects of interdependence. Property rights (+) and black market activity (-) have the highest levels of significance. Also contributing to the explanation are regulation (-), inflation (-), civil liberties (+), political rights (+), press freedom (+), government expenditures (+) and trade barriers (-) (but not trade levels). To check that these variables represent causes and are not the effects of high income, we also trace the trajectories of GNI/capita before and after political liberalizations or dictatorial retrenchments over the past half-century. Liberalizations are, on average, followed by dramatic improvement in country income, while substantial reductions in growth typically follow anti-democratic events. We conclude that countries can develop faster by enforcing strong property rights, fostering an independent judiciary, attacking corruption, dismantling burdensome regulation, allowing press freedom, and protecting political rights and civil liberties. These features define a healthy environment for economic activity.

Macedonia: End of the Beginning or Beginning of the End?

part of the world it is difficult to find the true path between reason and emotion, myth and reality. This is the burden of the Balkans, which prevents us from becoming truly European. --Kiro Gligorov First President of the Republic of Macedonia Following the horrific events of 11 September 2001, the security dilemma of the former Yugoslavia virtually vanished before the eyes of many policymakers. Understandably, the United States and Europe felt compelled to divert resources away from the region and into their mutual struggle against global terrorism. Yet for more than a decade, the Balkans presented the West with one of its greatest strategic and policy challenges. The prosecution and aftermath of four violent conflicts there--including the first military intervention by NATO--consumed billions of dollars and involved exhaustive diplomatic and regional initiatives. The Balkans no longer constitute a primary foreign policy challenge; does not mean, however, that the international community can afford to look in all directions other than Southeast Europe. The region itself is in a period of difficult, painful transition, and stands the chance of rapidly succumbing to transnational criminal influences and becoming a black hole of terrorism such as happened in Afghanistan, which became not a sponsor of terrorism but rather a terrorist-sponsored state. Even as halting progress toward representative government and institution-building takes place in Croatia, Serbia, and Kosovo, internal corruption, black-market activities, and illegal arms shipments threaten the stability of the region. When $25 can buy anyone a real, not a counterfeit, passport, the area has increasingly become attractive to those who easily escape the notice of already overstretched internal security forces. Nowhere has security dilemma entered a more crucial period than in Macedonia. To be sure, the first year of the 21st century was not kind to Macedonia. Although admitted as an associate of the European Union in April 2001--with the mutually proclaimed expectation of eventual EU membership--and a member of the so-called Vilnius Nine seeking membership in the next enlargement round of the North Atlantic Treaty Organization, Macedonia (as well as Albania) was widely regarded as having little to absolutely no chance of securing NATO membership during the Prague summit of 2002. (1) Yet among group of nine ex-communist states seeking NATO membership (widely seen as less restrictive than EU criteria for membership), such alliance and institutional membership was believed to be absolutely critical for both long-term security and to attract direct foreign investment in struggling economies. Within Macedonia itself, an ethnic Albanian insurgency under the rubric of the National Liberation Army (NLA) came perilously close to paralyzing the nation in a state of political and civil gridlock; equally, the leaders of NATO, the European Union, and the United States seemed unclear about what--if any--course of action was best to take regarding the fate of tiny ex-republic of the former Yugoslavia. (2) Ultimately, even the ethnic governing coalition within Macedonia, formed in May 2001 and proclaimed a national unity government, appeared incapable of agreement on central, critical issues. One informed observer caustically remarked, only days after the unity government's formation, that this government has nothing to do with genuine democracy ... [and] is too weak and fragile to undertake any serious reform in the country. (3) By the end of 2001, the coalition government had disintegrated and the nation drifted, once again, toward dissolution. In article, we argue that Macedonia's future is essential to the European security architecture. Whether or not Macedonia survives will largely be dependent on external forces and actors. …

International Validation of the Corruption Perceptions Index: Implications for Business Ethics and Entrepreneurship Education

International government and corporate corruption is increasingly under siege. Although various groups of researchers have quantified and documented world-wide corruption, apparently no one has validated the measures. This study finds a very strong significant correlation of three measures of corruption with each other, thereby indicating validity. One measure was of Black Market activity, another was of overabundance of regulation or unnecessary restriction of business activity. The third measure was an index based on interview perceptions of corruption (Corruption Perceptions Index or CPI) in that nation. Validity of the three measures was further established by finding a highly significant correlation with real gross domestic product per capita (RGDP/Cap). The CPI had by far the strongest correlation with RGDP/Cap, explaining over three fourths of the variance.Corruption is increasingly argued to be a barrier to development and economic growth. Business students often do not see ethics courses as being as relevant as other value-free disciplines or core courses. The data in this study suggests otherwise. Sustainable economic development appears very dependent on a constant, virtuous cycle that includes corruption fighting, and the maintenance of trust and innovation, all reinforcing each other.

Why Many Developing Countries Just Aren't

Annual income/capita varies across countries of the world by a factor of almost 100. Past literature has often associated income with culture, geography, history, and religion, but these cannot be easily changed. We seek to uncover mutable determinants of income. There is good news. More than 80% of the cross-country variation in per capita income can be explained by mutable determinants. Among these are property rights, black market activity, regulation, civil liberties, press freedom, government spending, trade barriers, inflation, and political rights. Data for five recent years 1995-99 were used in this determination. To check that these factors were causes and not the effects of high income, the trajectories of income before and after democratic and anti-democratic events were traced using data over the past half century. After a democratic event, income rises on average dramatically while the reverse is true after an anti-democratic event. We conclude that countries can develop faster by enforcing strong property rights, fostering an independent judiciary, attacking corruption, dismantling burdensome regulation, allowing press freedom, and protecting political rights and civil liberties. These features define a healthy environment for economic activity. Trade per se is not causative, but rather follows after the establishment of these conditions.

Making the third man look pale: American‐soviet conflict in Vienna during the early cold war in Austria, 1945–1950

Following World War II, American‐Soviet military relations in Vienna were never more than tolerable and, over time, rapidly declined. Beginning in 1945, US Army efforts to improve the situation in Vienna evoked deep suspicion and resistance on the part of the Soviets. In addition, Soviet black market activity proved endemic, producing a barrier to sound American‐Soviet relations. Most troubling, Soviet state security organs sought out and abducted a variety of individuals. By 1949, after the probable Soviet murder of an American government official and Soviet harassment of American operatives in the city, the US Army's Counter‐intelligence Corps began to conduct operations aimed at the Soviets. The above difficulties occurred at a location that was of secondary importance to the Superpowers. Significance: this essay suggests that in a location where American and Soviet personnel came into direct sustained contact, tensions could only have been avoided with constant pressure from above, and most likely not at all.

Is all the News Bad News for Peace?

ACADEMIC AND POLICY CIRCLES have recently devoted much attention to agendas in civil wars. Their findings: the economic functions of violence contribute significantly to the duration of civil wars; they also pose serious obstacles to conflict resolution. This article takes another look at the impact of economic agendas on the attitudes of belligerents to conflict resolution. I argue that the economic activities of insurgents can become a source of political and military vulnerability and thus contribute to decisions to negotiate a peace settlement.After a brief methodological note on research into economic agendas in civil wars and a review of the main findings of the literature on the subject, I challenge the prevailing understanding of the impact of economic agendas on the course of civil wars and use the example of the Lebanese Forces, the main Christian militia in the Lebanese civil war (1975-90), to illustrate the connection between economic agendas, strength, and vulnerability.(f.1)DEFINITIONS AND METHODOLOGICAL ISSUESThe term 'economic agendas' refers to the belligerents' involvement in black-market activities, ranging from transactions carried out 'off the books,' which are not different in substance from regular economic transactions, to criminal endeavours, which, by their very nature, contravene the law. Underground economic activities differ from conventional economic transactions in three respects:(f.2) - Unregulated: Since they are kept secret from governments, they fall outside the purview of a multitude of laws regulating exchanges of commodities and labour. - Untaxed: They do not generate tax revenues for the state or contribute to social security programmes. - Unmeasured: They are reflected in no official statistics on the economy.The nature of the activities raises special methodological problems that account, in part, for the relative dearth of empirical studies. Connections to the criminal 'underworld' shroud war economies in a secrecy that hinders efforts to obtain tangible evidence of theoretical claims. The context of civil wars, with the attending disruption of normal life, makes data collection arduous and research in the field hazardous.Within these limitations, it is, nonetheless, possible to sketch the role of the black market in the decision-making of the Lebanese Forces.(f.3) Indeed, this is a particularly instructive case. When the structures of the state collapse, as they did in Lebanon during the civil war, belligerents are often able to secure control over territorial enclaves wrested away from the state. The underground economy becomes the main economic activity within these enclaves. This may not necessarily increase the transparency of specific transactions; it does, however, provide a better sense of the scope and nature of the belligerents' economic undertakings.ECONOMIC AGENDAS IN CIVIL WARSAlthough relatively new to academic analysis, the study of economic agendas in civil wars has already generated a significant body of literature, which can usefully be divided into two main streams. One emphasizes greed as a primary motivation of violence; the other situates the economic agendas of combatants within the framework of efforts to address grievances.(f.4)When the motive is greed, violence is aimed at circumventing the law. Its immediate functions are local rather than national in scope. When a state collapses, military capabilities give warlords the means to extract economic resources for private profit.(f.5) Violence becomes a continuation of economics by other means.(f.6) Therefore, there is more to war than winning; for bandits or warlords it is logical to perpetuate conflict as a means of pursing economic interests. The policy implications are stark. There can be little prospect for conflict resolution as long as economic benefits flow to combatants. Sanctions, such as economic embargoes, may be the only available means to force combatants to the negotiating table. …

Foreign exchange markets in transition economies: China

The purpose of the paper is to examine the behaviour of exchange rates in China during the recent period of trade and exchange system reforms. A simple theoretical model based on the monetary approach is developed to explain the exchange rate in the parallel or black market, given the official and substantially controlled rate. The model is tested on quarterly data using the cointegration technique, error correction modeling and impulse response analysis. The results confirm the main features of the model and have policy implications concerning the use of devaluation and monetary policy for stimulating the economy, and the adoption of policies, which encourage black market activities.

Nonproliferation approaches in the Caucasus

Recent reports of the vast oil deposits in the Caspian Sea region have focused international attention on the importance of stability in the Caucasus. Yet the nuclear materials and expertise in these often overlooked newly independent states (Georgia, Armenia, and Azerbaijan) also pose a problem of international concern on three levels. At the ground level, maintaining control over these materials and watching over scientific expertise are imperative, yet measures are lacking as in most regions of the former Soviet Union, including Russia herself. At the domestic policy level, the political and economic instability of these states in transition hampers the strengthening of key institutions for the prevention of proliferation and provides an environment conducive to black market activities. At the regional level, the Caucasus represent both a geostrategically vital conduit and buffer between Russia and the Middle East and from the Caspian Sea to the West. Established smuggling routes are believed to exist. These factors combine to warrant a closer look at the approaches to nonproliferation in the Caucasus, which have the potential to deter, or foster, the leakage of nuclear materials and technology to potential proliferators.