Introduction
The global criminal economy is a complex and multifaceted phenomenon that has existed for centuries. From ancient empires and kingdoms to modern nation-states, criminal organizations have always found ways to profit from illegal activities. In recent years, the global criminal economy has grown to unprecedented levels, with estimates suggesting that it generates trillions of dollars in revenue each year.
The history of the global criminal economy is long and varied, but some key moments stand out as particularly significant. For example, the opium trade in the 19th century, which saw European powers colonizing and exploiting countries in Asia for their opium production, was a major contributor to the global criminal economy (Achim and Borlea, 2020). The prohibition of alcohol in the United States in the early 20th century also had a significant impact, as it created a lucrative market for bootleggers and organized crime groups.
Today, the global criminal economy is manifested in a variety of ways, including human trafficking, drug trafficking, arms trafficking, and the sale of illegal goods and services (Stahn, 2018). These activities often involve transnational criminal organizations, which use networks of intermediaries and front companies to launder their profits and evade detection. The global criminal economy also relies on corruption and bribery, as criminal organizations often bribe officials and law enforcement officers to operate with impunity.
Several factors contribute to the global criminal economy, including poverty, political instability, corruption, and the demand for illegal goods and services. In addition, the proliferation of technology and the internet has made it easier for criminal organizations to operate and communicate and has also made it easier for them to launder money and avoid detection. Finally, weak law enforcement in some parts of the world can create opportunities for criminal organizations to operate with impunity.
Predominant Theories
Structural Functionalism
Structural functionalism is a theory in sociology that suggests that all parts of society, including its institutions, work together to make it successful (Pansters, 2018). It is a macro-level approach that emphasizes the interrelatedness of all parts of society and the need for them to work together to maintain balance. According to this theory, the global criminal economy is a result of the lack of balance in the global system, as well as the unequal distribution of resources and power.
Structural functionalism can be applied to explain the origin of the global criminal economy by looking at the various institutions and structures in place which contribute to its existence. For example, it could be argued that the lack of effective regulations on a global scale has allowed criminal networks to form, while the unequal distribution of resources and power has led to a situation in which some countries are more vulnerable to criminal activity than others. In addition, the lack of international governance has allowed for the easy cross-border movement of criminals, leading to the spread of criminal activity.
One of the main advantages of using the structural functionalism theory is that it allows for an understanding of the global criminal economy in terms of the interconnectedness of various parts of the system (Müller, 2018). It also explains why the criminal economy has been able to thrive in such a globalized world – due to the lack of effective regulation and governance. However, one of the drawbacks of this approach is that it overlooks the cultural and individual factors that contribute to the formation of criminal networks, making it difficult to understand the motivations of those involved.
Social Disorganization Theory
Social disorganization theory is a sociological theory that suggests that neighborhood characteristics, such as poverty, residential mobility, and family structure, are associated with higher crime rates. The theory states that people living in areas of social disorganization, such as a poorly integrated community, are more likely to commit crimes due to a lack of social control and a breakdown in traditional values (Simmons, Lloyd, and Stewart, 2018). Neighborhoods with higher levels of poverty, residential mobility, and family disruption are more likely to produce criminal activity. This is because these areas tend to have weaker social networks, and therefore there is less social control or enforcement of laws. This lack of social control allows criminals to operate with impunity, which leads to an increase in criminal activity. Additionally, these areas tend to have weaker traditional values, which leads to a greater acceptance of criminal behavior. This, in turn, leads to more people engaging in criminal activity, which can eventually lead to the development of a global criminal economy.
The social disorganization theory explains why certain neighborhoods are more prone to criminal activity. Secondly, it explains why certain areas are more likely to produce organized crime, as well as why certain areas are more likely to be targeted by organized crime. Additionally, it can help to inform policies that could be implemented to reduce the prevalence of criminal activity in these areas. However, social disorganization does not take into account other factors that could be contributing to the prevalence of criminal activity in certain areas. Additionally, it does not address the underlying root causes of crime, such as poverty, inequality, and social exclusion. Thirdly, it can be difficult to measure the impact of social disorganization on crime, as many factors can influence criminal activity.
Strain Theory
Strain theory is a sociological and criminological theory developed by Robert K. Merton that attempts to explain deviant behavior as a result of the strain felt by individuals in society who are unable to achieve socially accepted goals due to a lack of resources (Barbieri et al., 2019). Specifically, strain theory suggests that economic, cultural, and social forces in society create unequal opportunities for success, and this inequality places strain on individuals in society. As a result, individuals may turn to criminal activities as a means of obtaining the success and recognition they are unable to attain through legitimate means.
Strain theory can be applied to explain the origin of the global criminal economy. The rise of global inequality has created a “haves” and “have nots” divide, in which some individuals have access to wealth, resources, and opportunities to achieve success, while others are deprived of these opportunities. This has led some individuals to turn to criminal activities as a means of obtaining the success they are unable to achieve through legitimate means. This has created a global criminal economy, in which individuals engage in illegal activities, such as drug trafficking, human trafficking, and arms trafficking, to obtain the wealth, resources, and power they are unable to achieve through legitimate means.
The theory explains why individuals engage in criminal activities and how these activities may be related to inequality. The cons of using strain theory are that it does not account for other factors that may contribute to an individual’s decision to engage in criminal activities, such as personal motivations or environmental influences. Additionally, it does not account for how these criminal activities become globalized and how the criminal economy continues to expand.
Cultural Deviance Theory
Cultural Deviance theory is an approach to understanding criminal behavior that looks at the role of culture in shaping the values and norms of a society. It suggests that criminal behavior is a result of cultural values that are different from those of mainstream society (Chan and Gibbs, 2019). The theory holds that people who come from a culture with different values and norms than those of mainstream society are more likely to engage in criminal behavior.
In terms of the global criminal economy, the Cultural Deviance theory can be used to explain the origins of the criminal economy by looking at how cultural values contribute to the development of criminal activities. For example, in many poorer countries, poverty and inequality are pervasive, leading to a lack of resources for people to support their families. This could lead to an increase in criminal activities such as drug trafficking, human trafficking, and other illicit activities as people try to find ways to make money.
The theory explains why certain cultures are more likely to engage in criminal activities than others. Further, it helps to explain the prevalence of certain types of criminal activities in different parts of the world. However, it is difficult to accurately measure the impact of cultural values and norms on criminal behavior. Additionally, this theory does not take into account other factors such as economic inequality, poverty, or political instability that could also contribute to criminal activities.
Causes
Poverty
The relationship between poverty and the global criminal economy is complex and multifaceted. From a political economy perspective, poverty can play a significant role in enabling the global criminal economy in several ways. First, poverty can serve as a push factor that drives individuals and communities into the global criminal economy (Demant et al., 2018). When individuals and communities lack access to legitimate economic opportunities and are unable to meet their basic needs through legal means, they may turn to the global criminal economy as a way to survive. This is especially true in regions where the rule of law is weak and the state is unable to provide basic services and protections. For example, in Brazil, poverty, and inequality have contributed to the growth of organized crime and drug trafficking in urban areas such as Rio de Janeiro and São Paulo (Feltran, 2020). In Afghanistan, poverty and a lack of economic opportunities have contributed to the growth of the opium trade, which is controlled by powerful criminal organizations and is a major contributor to the country’s ongoing conflict. In the United States, poverty and a lack of economic opportunities in certain communities have contributed to the growth of the illegal drug trade.
In impoverished communities, there may be a lack of education, healthcare, and other resources that can lead to social and economic instability. This instability can create an environment where criminal organizations can easily recruit members, as they may offer a sense of belonging and purpose that is lacking in these communities. For example, in West Africa, poverty and a lack of economic opportunities have contributed to the growth of illegal fishing and piracy in the Gulf of Guinea. Many fishermen in this region are unable to make a living from legal fishing due to overfishing and other factors, and as a result, some have turned to illegal fishing and piracy as a way to make a living.
Third, poverty can make it easier for criminal organizations to operate since less investment in infrastructure and law enforcement, which can make it easier for criminal organizations to move goods and evade detection. Additionally, impoverished communities may be more vulnerable to corruption, as individuals may be more willing to accept bribes in exchange for turning a blind eye to criminal activity. For example, in cities like Baltimore and Chicago, drug trafficking and gang activity are often concentrated in poor neighborhoods where residents lack access to legitimate economic opportunities (Barbieri et al., 2019).
Political Instability
Political instability refers to a lack of effective and legitimate governance, resulting in a state’s inability to provide security and basic services to its citizens. First, political instability can create an environment where the rule of law is weak or non-existent, making it easier for criminal organizations to operate (Coccia, 2018). When the state is unable or unwilling to enforce laws and provide basic protections, criminal organizations can take advantage of the power vacuum and engage in a range of illegal activities such as drug trafficking, human smuggling, and arms dealing. In Afghanistan, ongoing political instability and conflict have contributed to the growth of the illegal opium trade, which is a major source of income for many farmers and rural communities. The opium trade is often controlled by powerful criminal organizations and is a major contributor to the country’s ongoing conflict.
Political instability can further create economic uncertainty and disrupt legitimate economic activity, leading some individuals and communities to turn to the global criminal economy as a way to make a living. In times of political instability, individuals and businesses may be less likely to engage in legal economic activity due to concerns about the future and a lack of confidence in the state’s ability to provide security and stability (Joyce, 2017). This can create an environment where the global criminal economy flourishes as a way for individuals and communities to survive. In Venezuela, political instability and economic collapse have contributed to the growth of organized crime and the illegal drug trade. As the economy has deteriorated and the state has become weaker, criminal organizations have been able to take advantage of the power vacuum and engage in a range of illegal activities.
Third, political instability creates conditions that are ripe for corruption and illicit financial flows. When the state is weakened or lacking in legitimacy, it may be more susceptible to corruption and the influence of criminal organizations (Franko, 2019). This can lead to the illicit flow of money and resources out of the country, further undermining the state’s ability to provide basic services and security. In Somalia, political instability and a lack of effective governance have contributed to the growth of piracy in the Gulf of Aden. The absence of a strong state has made it easier for criminal organizations to engage in piracy and other illegal activities.
Corruption
Corruption refers to the abuse of entrusted power for private gain. It can take many forms, such as bribery, nepotism, and embezzlement, and it can occur at all levels of government and society. Corruption can create an enabling environment for criminal organizations to operate since when public officials are corrupt and willing to accept bribes, they may be more willing to look the other way when it comes to illegal activities such as drug trafficking and money laundering (Simmons, Lloyd, and Stewart, 2018). Corruption can further make it easier for criminal organizations to move goods and evade detection, as corrupt officials may be less likely to enforce laws and regulations. In Russia, corruption has contributed to the growth of organized crime and the illegal drug trade. Corruption at the highest levels of government has made it easier for criminal organizations to operate and evade detection.
Further, corruption can also undermine the rule of law and the legitimacy of the state. When the public perceives that the government is corrupt and not acting in the best interests of the people, it can lead to a lack of trust in the state and its institutions. This can create an environment where the global criminal economy flourishes, as individuals may be less likely to report criminal activity and more likely to turn to the global criminal economy as a way to make a living. In Mexico, corruption has contributed to the growth of drug trafficking and organized crime (Schultze-Kraft, Chinchilla, and Moriconi, 2018). Moreover, corruption at all levels of government has made it easier for criminal organizations to move drugs and evade detection.
Moreover, corruption facilitates illicit financial flows and the erosion of state resources. When public officials embezzle funds or accept bribes, it can lead to the illicit flow of money out of the country and the erosion of state resources that are meant to be used for the public good. This can further undermine the state’s ability to provide basic services and security. In China, corruption has contributed to the growth of illicit financial flows and the erosion of state resources. Corruption at the highest levels of government has facilitated the illicit flow of money out of the country and the erosion of state resources that are meant to be used for the public good.
Demand for Illegal Goods and Services
Demand for illegal goods and services plays a significant role in enabling the global criminal economy. From a political economy perspective, demand for illegal goods and services can be driven by a range of factors, including the desire for lower prices, the lack of availability of legal alternatives, and the allure of forbidden products.
Demand for illegal goods and services can be driven by the desire for lower prices since in many cases, illegal goods and services can offer lower prices than their legal counterparts due to a lack of taxes and regulatory costs (Stahn, 2018). This can make illegal goods and services more attractive to consumers, especially in cases where legal alternatives are expensive or unavailable. In the United States, the demand for illegal drugs has contributed to the growth of the illegal drug trade. The desire for lower prices and the allure of taboo substances have driven demand for illegal drugs such as cocaine and heroin.
Second, demand for illegal goods and services is associated with the availability of legal alternatives. In several scenarios, there may be a lack of legal alternatives for certain goods and services, either due to cultural or legal restrictions or a lack of supply. In these cases, individuals may turn to the global criminal economy as a way to access these goods and services. In China, demand for illegal wildlife products has contributed to the growth of the illegal wildlife trade. The desire for traditional medicine and the allure of forbidden or exotic products have driven demand for illegal wildlife products such as tiger bone and rhinoceros horn.
Third, in some cases, the illegal nature of certain goods and services can make them more attractive to consumers, as they may be seen as taboo or forbidden. In the Middle East, demand for illegal arms has contributed to the growth of the illegal arms trade. The lack of availability of legal alternatives and the desire for lower prices have driven demand for illegal arms. The global criminal economy is therefore driven in large part by the demand for illegal goods and services, such as drugs, weapons, and human trafficking. As long as there is a demand for these types of products, criminal organizations will continue to supply them.
Ease of Access to Technology
The ease of access to technology has played a significant role in enabling the global criminal economy from a political economy perspective. In the modern digital age, technology has become increasingly integrated into all aspects of society, including the world of crime. The proliferation of the internet and the increasing accessibility of digital devices has provided criminals with new opportunities to conduct illicit activities on a global scale (Müller, 2018).
One example of how technology has enabled the global criminal economy is through the use of the dark web. The dark web is a part of the internet that is not indexed by search engines and can only be accessed using specialized software. It has become a hub for the sale of illegal goods and services, including drugs, weapons, and stolen data. The anonymity provided by the dark web allows criminals to operate with relative impunity, making it difficult for law enforcement to track and prosecute them.
Secondly, cryptocurrencies have gained popularity among criminals due to their decentralized nature and the ability to transact without the need for a central authority. This makes it difficult for law enforcement to trace the movement of funds and track down criminal activity. Online marketplaces and the rise of e-commerce have further created a vast array of online marketplaces where individuals can buy and sell goods and services. While many of these marketplaces are legitimate, there are also a significant number of illegal marketplaces where criminals can buy and sell stolen goods, counterfeit products, and illegal services.
Weak Law Enforcement
The global criminal economy is a complex and multifaceted phenomenon that is enabled by various factors, including weak law enforcement. From a political economy perspective, weak law enforcement can be seen as a result of broader structural forces and interests that shape how states prioritize and allocate resources for crime control.
One example of weak law enforcement enabling the global criminal economy is the case of transnational organized crime in West Africa (Joyce, 2017). In this region, weak law enforcement and corruption have facilitated the proliferation of illicit activities such as drug trafficking, human smuggling, and illegal logging. The illicit profits generated by these activities are often used to bribe officials and undermine the legitimacy of state institutions, further perpetuating the cycle of weak law enforcement.
Another example is the role of weak law enforcement in facilitating money laundering and tax evasion in offshore financial centers. These centers, such as the Bahamas and the Cayman Islands, are often used by wealthy individuals and multinational corporations to evade taxes and conceal illicit funds (Demant et al., 2018). The lack of effective regulation and enforcement in these jurisdictions enables these activities to occur with relative impunity. A third example is the case of wildlife trafficking in Southeast Asia, where weak law enforcement and corruption have allowed poachers and traffickers to operate with relative ease. This has had devastating consequences for biodiversity and the survival of endangered species, such as elephants and rhinos.
One relevant theory is the social disorganization theory, which suggests that crime and deviance are more likely to occur in areas with weak social bonds and institutions. In the context of weak law enforcement and the global criminal economy, this theory would suggest that the proliferation of illicit activities is more likely to occur in states or regions with weak social bonds and institutions, such as high levels of corruption and weak rule of law. Another relevant theory is the institutional anomie theory, which posits that crime and deviance are more likely to occur in societies with a high level of strain between cultural goals and the means available to achieve them. In the context of weak law enforcement and the global criminal economy, this theory would suggest that individuals or groups may turn to illicit activities as a means of achieving economic or social goals when legal means are unavailable or inadequate.
Conclusion
The global criminal economy is driven by a complex set of factors, including economic inequality, political instability, corruption, and technological advances. To address these issues, it is important to consider the roles and responsibilities of various stakeholders. These include governments, international organizations, the private sector, civil society, and communities affected by crime.
Economic inequality may be addressed by investment in education, job training, and economic development initiatives that create opportunities for legitimate income and social mobility. Governments can also implement progressive taxation policies and social safety net programs that reduce poverty and income inequality. Political instability and corruption may be addressed by strengthening governance and rule of law institutions, as well as promoting transparency and accountability in the public sector. This may involve strengthening democratic institutions and processes, promoting the rule of law, and supporting civil society organizations that advocate for reform. The role of technology may be addressed through investment in law enforcement capabilities that can keep pace with technological change and promote the responsible use of technology. This may involve working with the private sector to develop new tools and techniques for tracking and disrupting criminal networks, as well as educating individuals and communities about the potential risks and challenges posed by technology.
Furthermore, it is important to continue researching and studying the global criminal economy to better understand the drivers of this phenomenon and develop more effective strategies for addressing it. This may involve studying the patterns and trends of criminal activity, as well as the impact of different interventions on reducing crime. It is also important to engage a wide range of stakeholders, including affected communities, in the design and implementation of crime prevention and reduction initiatives.
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