Illicit Economy Research Articles

Economía criminal y violencia en Tijuana

<p>Entre 2008 y 2010, Tijuana vivió una ola de violencia sin precedentes en la historia reciente de esta ciudad fronteriza. Este artículo analiza los impactos de esa ola de violencia y de la economía criminal de Tijuana, enfocándose en el espacio social y el mercado inmobiliario de la ciudad. Además, se busca identificar a posibles “ganadores”, en términos inmobiliarios, ligados a los impactos de la criminalidad y su poderosa economía ilícita. El artículo se basa en testimonios anónimos de residentes y víctimas directas e indirectas de la violencia criminal y estatal.</p>

(Mis)understanding the intersection between development policies and data collection: Experiences in Afghanistan

There is a misalignment between a development community focused on improving the welfare of vulnerable populations and the challenges of addressing widespread illicit drug crop production in drug producing countries. Drawing on the example of Afghanistan, this paper argues that the reasons for the development communities failure to engage is in large part a function of the way that illicit opium poppy and the illicit economy is currently perceived and understood by policy makers, practitioners and scholars. Much of the problem lies with the various statistics used to describe and quantify opium production in Afghanistan, many of them produced by UNODC and cited repeatedly in media coverage and the academic literature. These statistics shape how we have come to understand the scale and nature of the drugs problem, and thereby have informed policy responses. This paper argues that it is critical that policy makers and scholars fully understand the veracity of drug related statistics, including their methodological and conceptual limitations, before using them as the foundations for development programmes or policy responses. Indeed, this paper argues that many of these statistics have presented a simplified and ‘profit maximising’ model of the factors influencing farmers’ livelihoods choices, which has proven deeply misleading and further alienated the development community from engaging constructively with the challenges of illicit drug production in developing countries.

The Complex Relationship between Sanctions and North Korea's Illicit Trade

The Complex Relationship between Sanctions and North Korea's Illicit Trade Justin V. Hastings (bio) North Korea's illicit trade and sanctions have a complex relationship.1 In this essay, I argue that while North Korean companies do engage in illicit trade to bypass sanctions, much of such trade is actually the result of the fundamental dysfunction of the Kim regime and how the North Korean economy has evolved in the past several decades. That said, North Korea has been forced by sanctions to adapt the way it does business inside and outside the country. Because much of the illicit trade does not benefit the regime directly, it may actually behoove the international community to encourage some types of illicit trade and to provide an outlet for the regime to make money other than through dealing in weapons and illicit goods. Sanctions and the Illicit Economy North Koreans do indeed engage in illicit trade as a way of bypassing sanctions and sanction-enforcement mechanisms, specifically in buying or selling goods that have been declared off limits by UN Security Council resolutions. But there are two other main reasons that North Koreans engage in illicit economic activities and trade that have little to do with sanctions. First, the North Korean system at its most basic level encourages, and in many cases practically requires, economic activities to be illicit. In the years since the Arduous March killed a significant percentage of the North Korean population and citizens responded by going into business for themselves as a means of survival,2 North Korea, particularly under Kim Jong-un, has developed a modus vivendi whereby the lines between formal [End Page 28] and informal status, state and nonstate trade, and licit and illicit economic activities are blurred. Nearly every economic actor in North Korea is involved directly or indirectly in illicit trade, or more generally the illicit economy. Central state companies defy sanctions to export proscribed goods and import sanctioned items (which have long since ceased to be merely the technology that could be used in weapons programs). Other state companies with trading licenses go abroad (usually to China) to make money via whatever means they can. Private companies masquerade as state-owned companies by paying off state officials to buy and sell both legal and illegal goods, while state officials moonlight as entrepreneurs using their public positions. Private individuals use family members and other connections in China to move consumer goods and food across the border, often outside formal checkpoints or in violation of trade regulations.3 The North Korean economy as a whole functions as what has been called a "food chain," where every level of society and the state must pay rents to their superiors for the right to operate, and Kim Jong-un and his circle serve as the apex predators collecting rents indirectly from everyone below them.4 Because all private enterprise in North Korea is technically illegal, the state benefits from a system in which officials can collect bribes and fees to allow private and hybrid businesses to operate but have the legal leeway to crack down on them at any time. The state does not really care where the income to pay rents up the food chain actually comes from. This leads to a situation where the state (and officials) can indirectly benefit from what are often large-scale, institutionalized illicit economic activities without being directly involved. Drug trafficking, for example, likely has not been directly run by the North Korean government (in the sense of using central state–owned factories for production and ships for trafficking) since the mid-2000s, but the state continues to benefit indirectly from drug-trafficking profits.5 Second, many North Koreans engage in illicit economic activities, particularly trade, as a way of mitigating state-imposed political and [End Page 29] economic risk and moving profits out of the country (such as through smuggling gold into China).6 Because North Korea has few financial institutions or dispute-resolution mechanisms that encourage commerce, and because market actors must cultivate relationships with government officials (through bribes, gifts, and a cut of profits) as a way of getting any business done, regardless of the ostensible...

IS – LM model revisited in the perspective of underground economy

PurposeThe purpose of this paper is to review the investment-savings, liquidity-money (IS–LM) model used in the traditional macroeconomic theory as an important tool to analyze the dynamics of product and money market. The IS curve represents product market equilibrium condition and the LM curve represents money market equilibrium condition. However, the traditional IS–LM model was formulated mainly keeping in mind the dynamics of the product and money markets of developed economies. Thus, there was an urgent need to explore the pre-established IS–LM model in the light of existing enormous, illicit underground economies prevalent all around the world.Design/methodology/approachIn this paper, an exploratory attempt has been made to review the IS–LM model in the light of various illicit practices and by incorporating some assumptions that are relevant to this discussion. In this model, ISil curve could be defined as a locus of points each representing a combination of evaded tax and output of the illicit economy that will keep the illicit economy in equilibrium and, the LMil curve could be defined as a locus of points each representing a combination of illicit supply of money and output of the illicit economy that will keep the illicit economy in equilibrium.FindingsThis paper is aimed at analyzing the traditional IS–LM model from a different perspective, namely, the pervasive underground economy thriving all around the world regardless of the stages of growth and development. A sincere attempt has been made to keep the assumptions simple and closest to the real-world scenario as well as pertinent to the logic of economic theory. In this paper, two major factors of illicit practices, i.e. tax evasion and bribery, are given prime importance and the discussion is focused on those two factors of corruption.Originality/valueThis paper has been prepared keeping in view the standard technical procedures and findings that are described in the relevant academic materials like textbooks and journal publications (mentioned under the “References” column). The analysis and findings appearing in the article are based on logical explanations and are completely free from plagiarism.

Después del auge. Campos de poder en el valle del Monzón

This article tries to explain what influence an illicit economy has on power structures in the margins of the state. Still, academic understanding on the influence of illegal economies on local order is limited. The concept of fields of power by Pierre Bourdieu offers analytical tools which allows to track more precisely the relationship between illicit economies and power. The case study on the valley of Monzon allows to present the effect of the coca economy as predominant factor during a boom period. The destruction of the coca economy by the Peruvian state offers on the other hand the opportunity to analyze the loss of this determinant factor for the power structures in a society. The article shows the importance for an illicit economy for the local field of power. This gives a better understanding on the influence of illicit economies and the effect of state intervention.

The illicit economy of power: smuggling, trafficking and the securitization of the Indo-Bangladesh borderland

This paper presents an ethnography of the India and Bangladesh international border areas. It focuses on the illicit economy, its structure and operation, and more importantly, its linkages with the state apparatus. It tries to demonstrate how the securitization of the border has affected the illicit economy. The paper explores how the triangular interaction between (1) the apparatus of border and security personnel, (2) illicit economy and smugglers and (3) the ordinary society produces a dynamic which is different from the mainland of a nation. It creates an exceptional political space where the normal liberal structure of a nation-state, and the state-citizen-civil society mediations are suspended. As a result, local communities have very little control over either the state apparatus or the illicit economy, and they live in the fear and intimidation—not of the enemy of the state or the nation, but the state’s security forces and the criminals. The border is the zone where the naked dance of the sovereign and the criminal power can be witnessed.

The most ‘undeserving’ of all? How poverty drives young men to victimisation and crime

Public policy reform over several decades has succeeded in systematically impoverishing and worsening the social and economic conditions of poor, single young men. That this group is the most prone to criminality and criminalisation, while being pushed further into the margins of the licit and illicit economy, has been a central feature of long-term and growing crime trends. The article argues that successive governments have been unwise to neglect the poverty of unemployed, single young men into young adulthood. Their comparatively unfavourable treatment (as the most ‘undeserving’ of the ‘undeserving poor’) has impoverished a group renowned for being crime-prone.

Globalisation masculinities, empire building and forced prostitution: a critical analysis of the gendered impact of the neoliberal economic agenda in post-invasion/occupation Iraq

Adopting a transnational feminist lens and using a political economy approach, this article addresses both the direct and indirect consequences of the 2003 war in Iraq, specifically the impact on civilian women. Pre-war security and gender relations in Iraq will be compared with the situation post-invasion/occupation. The article examines the globalised processes of capitalism, neoliberalism and neo-colonialism and their impact on the political, social and economic infrastructure in Iraq. Particular attention will be paid to illicit and informal economies: coping, combat and criminal. The 2003 Iraq war was fought using masculinities of empire, post-colonialism and neoliberalism. Using the example of forced prostitution, the article will argue that these globalisation masculinities – specifically the privatisation agenda of the West and its illegal economic occupation – have resulted in women either being forced into the illicit (coping) economy as a means of survival, or trafficked for sexual slavery by profit-seeking criminal networks who exploit the informal economy in a post-invasion/occupation Iraq.

Human Trafficking: Fighting the Illicit Economy with the Legitimate Economy

Since the beginning of research on human trafficking, there has been attention paid to the challenges surrounding the illicit economy. In creating new strategies and initiatives on combatting human trafficking, there needs to be more discussion surrounding the legitimate economy and how the business sector can make an impact in the fight against trafficking. Currently, there is a growing movement of businesses that are looking to address human trafficking through training, education, and leadership initiatives; codes of conduct; supply chain management; and financial analysis. This paper will examine the latest in these strategies and approaches by businesses in the global war against human trafficking, in addition to a discussion of a new initiative engaging the private sector co-led by Dr. Louise Shelley and Christina Bain through the World Economic Forum’s Global Agenda Council Network.

Gaming the state: consequences of contracting out state building in Afghanistan

The operation of a vibrant illicit economy and government corruption are widely acknowledged as obstacles to the post-conflict reconstruction of Afghanistan. However, massive influxes of money tied to the international efforts have led to ‘legal’ corruption that similarly obstructs state consolidation and peace. This paper considers the various ways in which Afghan entrepreneurs have learned to ‘game the state’ by taking advantage of donor and especially US procurement systems since 2001. The conceptual framework and evidence suggests that designing ways to limit corruption arising from the state-building process is key to improving the long-run prospects for post-conflict reconstruction in Afghanistan and similar states where rapid and steep increases in foreign aid and associated contracts create fertile ground for malfeasance.

Calibrating law enforcement and its purpose.

Calibrating law enforcement and its purpose.

Substance Dependency: A Global Multi‐Dimensional Medical and Socio‐Economic Problem

The World Medical Association (WMA, 2005) finds that alcohol use is deeply embedded in many societies and is a major contributor to the global burden of morbidity and mortality. Substance dependency, including alcohol, tobacco, and recreational drugs, continues to plague our society and snatch productive life. In many countries these substances provide a source of legal income through taxation. However, they also fuel an illicit economy, crime, absenteeism, and threaten communities and individual family well-being. Children and youth are not immune to alcohol, tobacco, and recreational drugs and are a vulnerable target for illegal trafficking. Alcohol users are more likely to smoke, or engage in the use of illicit or prescription drugs. Like tobacco and narcotics habituation, alcohol abuse interventions, treatments, and access to health services are also woefully inadequate worldwide (Limosin, 2014). Europe has the highest amount of alcohol consumption per capita, especially in Russia and surrounding countries. Islamic countries, regions of the Eastern Mediterranean, and Southeast Asia, predominantly India, experience lower rates of alcohol consumption. Globally, alcohol consumption has been estimated to be the cause of 3.8 percent of all deaths and 4.6 percent of the burden of disease (Rehm et al., 2009). In 2008 the global economic burden of alcohol alone was estimated at 0.45 to 5.44 percent of GDP (Thavorncharoensap, Teerawattananon, Yothasamut, Lertpitakpong, & Chaikledkaew, 2009). In the Americas, alcohol has been found to be an important contributor to the burden of disease, surpassing smoking, obesity, and hypertension (Rehm & Monteiro, 2005). A May 12, 2014 World Health Organization (WHO) report estimates that 3.3 million deaths in 2012 can be attributed to the harmful use of alcohol (WHO, 2014). The report also highlights that over 200 medical conditions, such as violence, road accidents, metabolic disorders, and liver cirrhosis, afflict a significant number of individuals. Many nations have developed policies to combat the spread, or at least limit the consequences, of the use of alcohol, tobacco, and substance dependencies. Outreach, education, and legal measures so far have not met expectations and markedly reduced the health and societal impacts of substance dependency. The 1961 Single Convention on Narcotic Drugs (SCND) and the 1999 Framework Convention on Tobacco Control (FCTC), are steps in the right direction; however, a Convention on Alcohol Control is still being debated. It is obvious that more comprehensive and stronger measures are required to reduce the health and societal burden of alcohol, tobacco, and narcotic drug use. Such global policy will require a complex set of international negotiations, advocacy, and political good will. However, the pay-off in terms of reduced suffering, lives saved, and socioeconomic gains should be worth the effort and perseverance. World Medical and Health Policy is pleased to dedicate this issue to the policy and politics of alcohol control and prevention. The Editors would like to thank all the contributors who responded to the call for papers for this special issue of the journal. Arnauld Nicogossian is distinguished research professor and Director of the Center for Study of International Medical Policies and Practices, at the School of Public Policy, George Mason University. Bonnie Stabile is research assistant and assistant director of the Center for Study of International Medical Policies and Practices in the School of Public Policy at George Mason University. Otmar Kloiber is Secretary General of the World Medical Association. Thomas Zimmerman is executive director of the International Society for Microbial Resistance.

Exploring Narco-Sovereignty/Violence

Often scholars identify the cocaine industry as a principal source of violence and conflict in different parts of urban and rural Latin America. As the ethnographical research in the Peruvian Upper Huallaga demonstrated, the mere presence of an illicit economy, in itself, does not always cause violence. In the Upper Huallaga’s rural areas, new Peruvian small-scale firmas established forms of power and domination. This article provides a broader understanding of the relationship within the local cocaine industry between those running it (the drugs bosses or patrones) and the population. It focuses on the realities of life in these villages, where the cocaine trade, far from being only an economical system, dominated social relationships and networks. Most incidents of violence were closely related to the diminishing cocaine industry, but were also related to the actions or the lack of actions of the state security forces.

Consecuencias sociales del cultivo de la coca en comunidades afrocolombianas del Caquetá: Análisis de la relación entre la economía ilícita, las prácticas campesinas tradicionales y su papel en la seguridad alimentaria

El artículo expone los principales resultados de una investigación sobre las consecuencias que la adopción del cultivo de coca, las lógicas productivas de la economía ilícita, y las políticas antinarcóticos del estado Colombiano han significado para la seguridad y soberanía alimentaria de comunidades afrocolombianas en el departamento del Caquetá. El trabajo se sustentó en un extenso trabajo de campo realizado en la zona rural de la inspección de Rionegro, municipio de puerto Rico. En el texto se analiza el papel que juegan la historia regional, el contexto social y económico en las razones que permiten explicar el por qué de la presencia de la coca. Se da cuenta de las principales características de la modalidad de producción familiar que caracteriza la coca en la región y finalmente, y se exponen los impactos que la política antinarcóticos tiene sobre la seguridad alimentaria de las comunidades en la región de estudio. En aras de aportar elementos para el debate de las alternativas para el cultivo de la coca, el artículo demuestra cómo las practicas productivas en la región, tanto legales e ilegales, no pasan por la construcción de un proyecto de soberanía alimentaria y no llegan a satisfacer los puntos básicos de seguridad alimentaria.

Losing The War on Drugs, One Field at Time

I 1988, a foreign correspondent published an article in the New York Times describing the latest campaign in the decades-old “War on Drugs.” Instead of being fought on the streets of America, however, the front was in the jungles of Peru. Among the thousands of bright green coca fields covering the Upper Huallaga Valley, a tiny plot brown with dead plants represented the United States’ latest hope of winning the war against cocaine. A new herbicide tested at the site by American and Peruvian scientists had finally proved effective against the hardy coca plant, and with experiments with aerial application in progress, the United States Government was planning the first program of large-scale eradication. Craig Chretien, head of the United States Drug Enforcement Administration’s operation in Peru, declared that ‘’This is the only way we’re going to get a handle on the cocaine problem.” Such was the tough rhetoric coming from America’s foreign policy leaders during the Reagan era, when such terms as “The Evil Empire” were popularized, and politicians relished policies of “getting tough on crime” at home and abroad. Today, America is losing, and indeed may have already lost, the war on drugs. Many of the policies designed to stem the flow of narcotics from the third world to America’s city streets in the 1980s turned out to be counterproductive. In case after case, government-led eradication of illicit crops, such as poppy or coca, have led to unintended economic and behavioral consequences. By attacking the supply of illicit drugs, the prices of these goods shot up on the international market and increased revenues. Perhaps as importantly, eradication programs cost governments the support of the local populations whose livelihoods depended on the illicit economy. This is the subject of “Shooting Up, Counterinsurgency and the War on Drugs,” (Brookings Institution Press, 2010), in which Brookings Senor Fellow Vanda Felbab-Brown argues that conventional strategies surrounding the

Rethinking insurgency: criminality, spirituality, and societal warfare in the Americas

Driven by globalization, Internet communications technology (ICT), and new economic forms the nature of states may be changing. Transnational criminal organizations (TCOs) – including what are commonly known as cartels – are early adopters to the new political/economic landscape. In addition to seeking to rule the illicit economy, criminal actors (networked cartels and gangs) are challenging states through high-order violence and leveraging nascent social/spiritual movements (narcocultura) to potentially usher in a new political dynamic. These violent non-state actors (criminal soldiers) are insurgent actors. They are waging new forms of insurgency – criminal and possibly spiritual – that have the potential to reconfigure states.

An illicit economy: Scavenging and recycling of medical waste

This paper discusses a significant illicit economy, including black and grey aspects, associated with medical waste scavenging and recycling in a megacity, considering hazards to the specific group involved in scavenging as well as hazards to the general population of city dwellers. Data were collected in Dhaka, Bangladesh, using a variety of techniques based on formal representative sampling for fixed populations (such as recycling operatives) and adaptive sampling for roaming populations (such as scavengers). Extremely hazardous items (including date expired medicines, used syringes, knives, blades and saline bags) were scavenged, repackaged and resold to the community. Some HCE employees were also observed to sell hazardous items directly to scavengers, and both employees and scavengers were observed to supply contaminated items to an informal plastics recycling industry. This trade was made possible by the absence of segregation, secure storage and proper disposal of medical waste. Corruption, a lack of accountability and individual responsibility were also found to be contributors. In most cases the individuals involved with these activities did not understand the risks. Although motivation was often for personal gain or in support of substance abuse, participants sometimes felt that they were providing a useful service to the community.

Afghanistan in 2008: State Building at the Precipice

The state-building endeavor in Afghanistan came to the brink in 2008 with the Taliban insurgency taking control of some southern districts, high poppy production fueling the illicit economy, widespread charges of corruption, and a looming humanitarian disaster. Afghans increasingly became disillusioned by high civilian casualties and the government's failure to provide improved socioeconomic conditions. By year's end, there was also increased pressure for negotiations with moderate Taliban elements.

L'Oeuvre au Noir : The Shadow Economy of Kosovo's Independence

The article analyses the nexus between illicit economy, violent conflict and peacetime politics in Kosovo. It examines political agendas, client interests and transnational criminal activities, taking into account the interaction between local and international actors involved in peacebuilding. While making sense of emerging trends and regularities, the analysis identifies dilemmas and challenges that counter-crime strategies have to address in Kosovo. The contention is that elements of historical discontinuity are discernible but the global economy remoulds traditional structures, and grey and black market profits give organized crime a formidable opportunity to emancipate itself from the role of service provider, often allowing direct intervention in the management of political violence and in crafting the state-making project.

Afghanistan in 2007: A Bleeding Wound

The year 2007 has not brought much hope for Afghans whose country remains in the grip of increasing violence and Taliban insurgency, both hampering reconstruction. The increasing levels of opium production have provided a boost to the growing illicit economy and also to the insurgency. Governmental institutions remain frail and are largely ineffective outside the capital.