Advertisement

Economists’ consensus: models and estimates

  • Petrus C. van DuyneEmail author
  • Jackie H. Harvey
  • Liliya Y. Gelemerova
Chapter

Abstract

The interest of economists in crime is not a coincidence or a diversion from the attention of their strict discipline. Apart from personal harm, most crimes concern financial loss and damage or criminal revenue: all of these are economic variables. This interest is traced back by various academics to Becker’s seminal 1968 work “Crime and punishment: an economic approach” (see for example, Brennan and Eusepi, 2008; McCarthey et al., 2014; and Arnone and Borlini, 2010). However, the relationship between crime and money and, more generally, the positioning of criminal activity as a natural facet of capitalist society, goes back further in the literature which was mainly focussed on white collar and corporate crime (see for example Bequai, 1979; Braithwaite, 1988). For example, Naylor (2003, p.82) describes “the inherent economic logic of profit driven offences”. Naylor further drew attention to the lack of precision of the definition of ‘economic crime’. He noted that the terms economic, profit driven, white collar or financial crime, were freely interchanged though their meanings are different. They cover some different and some overlapping fields of criminal conduct.

References

  1. Alldridge, P., (2002), Moral Limits of the Crime of Money Laundering, Buff. Crim. L. Rev, 5, 279–320.Google Scholar
  2. Alldridge, P., (2003), Money Laundering Law: Forfeiture, confiscation, civil recovery, criminal laundering and taxation of the proceeds of crime, Oxford –Portland Oregon: Hart Publishing.Google Scholar
  3. Alvesalo, A. and Tombs, S., (2005), Evaluating Economic Crime Control? Security Journal, 18(4), 7–15.CrossRefGoogle Scholar
  4. Araujo, R.A., (2008), Assessing the efficiency of the anti-money laundering regulation: an incentive-based approach, Journal of Money Laundering Control, 11(1), 67–75.CrossRefGoogle Scholar
  5. Araujo, R.A., (2010), An evolutionary game theory approach to combat money laundering, Journal of Money Laundering Control, 13(1), 70–78.CrossRefGoogle Scholar
  6. Gardner, K.L. (2007), Fighting Terrorism the FATF Way. Global Governance 13, 325–345.Google Scholar
  7. Argentiero, A., Bagella, M. and Busato, F., (2008). Money laundering in a two-sector model: using theory for measurement. European Journal of Law and Economics, 26(3), 341–359.CrossRefGoogle Scholar
  8. Arnone, M. and Borlini, L., (2010), International anti-money laundering programs. Empirical assessment and issues in criminal regulation. Journal of Money Laundering Control, 13(3), 226–271.CrossRefGoogle Scholar
  9. Barone, R., and Masciandaro, D., (2011), Organized crime, money laundering and legal economy: Theory and simulations. European Journal of Law and Economics, 32(1), 115–142.CrossRefGoogle Scholar
  10. Baumol, W., (1990), Entrepreneurship: productive, unproductive and destructive. J. Pol. Econ., 98(5), 893–921.CrossRefGoogle Scholar
  11. Gary S. Becker, (1968) “Crime and Punishment: An Economic Approach,” Journal of Political Economy 76 (2): 169–217.CrossRefGoogle Scholar
  12. Bello, A.U., (2014), Self-protecting theory a classical grounded theory study of money laundering reporting officers (MLROs), Ph. D. Thesis, University of Northumbria at Newcastle. Faculty of Business and Law, Northumbria University.Google Scholar
  13. Bello, A.U. and Harvey, J.H., (2017), From a risk-based to an uncertainty-based approach to anti-money laundering compliance, Security Journal, 30(1), 24–38.CrossRefGoogle Scholar
  14. Bequai, A., (1979), White collar crime: a 20th-Century crisis. Lexington: Heath and Company.Google Scholar
  15. Blickman, T., (2009), Countering Illicit and Unregulated Money Flows: Money Laundering, Tax Evasion and Financial Regulation. Crime and Globalisation Debate Papers, TNI Briefing Series.Google Scholar
  16. Boorman, J., and Ingves, S., (2001), Financial system abuse, financial crime and money laundering—background paper. Washington: Monetary and Exchange Affairs and Policy Development and Review Departments, International Monetary Fund.Google Scholar
  17. Bosworth-Davies, R., (2008), The influence of Christian moral ideology in the development of anti-money laundering compliance in the west and its impact, post 9-11, upon the South Asian Market. Journal of Money Laundering Control, 11(2), 179–192.CrossRefGoogle Scholar
  18. Braithwaite, J., (1988), White-Collar Crime, Competition, and Capitalism: Comment on Coleman. American Journal of Sociology, 94(3), 627–632.CrossRefGoogle Scholar
  19. Brennan, G. and Eusepi, G., (2008), Guest Editorial: Introduction. European Journal of Law and Economics, 26, 233–235.CrossRefGoogle Scholar
  20. Buchanan, B., (2004), Money laundering - A global obstacle. Research in International Business and Finance, 18(1), 115–127.CrossRefGoogle Scholar
  21. Busuioc, M., (2007), Defining Money Laundering. Predicate Offences-The Achilles’ Heel of Anti-Money Laundering Legislation. In B. Unger (ed.), The Scale and Impacts of Money Laundering Cheltenham: Edward Elgar.Google Scholar
  22. Chaikin, D., (2009). How effective are suspicious transaction reporting systems? Journal of Money Laundering Control, 12(3), 238–253.CrossRefGoogle Scholar
  23. Chong, A. and López-de-Silanes, F., (2007), Money Laundering and its regulation. Washington, D.C: Inter-American Development Bank.Google Scholar
  24. Clarke, R.V. and Cornish, D.B., (1985), “‘Modelling Offenders’ Decisions: A Framework for Research and Policy” In M. Tonry and M. Morris, (eds.) Crime and Justice: An Annual Review of Research, Vol 6. Chicago, IL: University of Chicago Press.Google Scholar
  25. Coase, R., (1937), The nature of the firm. Economica, 4(16), 386–405.CrossRefGoogle Scholar
  26. Cornish, D. and Clarke, R., (1987), Understanding crime displacement: An application of rational choice theory. Criminology, 25(4): 933–947.CrossRefGoogle Scholar
  27. Cuéllar, M-F., (2003), The tenuous relationship between the fight against money laundering and the disruption of criminal finance. The Journal of Criminal Law and Criminology, 93(2/3), 311–466.Google Scholar
  28. de Boyrie, M.E., Pak, S. J., Zdanowicz, J. S., (2005), The impact of Switzerland’s money laundering law on capital flows through abnormal pricing in international trade Applied Financial Economics, 15(4), 217–230.CrossRefGoogle Scholar
  29. de Koker, L., (2009), Identifying and managing low money laundering risk. Journal of Financial Crime, 16(4), 334–352.CrossRefGoogle Scholar
  30. Demetis, D. S. and Angell, I. O., (2007), The risk-based approach to AML: representation, paradox, and the 3rd directive. Journal of Money Laundering Control, 10(4), 412–428.CrossRefGoogle Scholar
  31. Duyne, P. C. van, (1994), Money-laundering: estimates in fog. The Journal of Asset Protection and Financial Crime, 19, 103–142.Google Scholar
  32. Duyne, P.C. van, (1998), Money-laundering, Pavlov’s dog and beyond. The Howard Journal, 37(4), 395–374.Google Scholar
  33. Duyne, P.C. van., (2003), Money laundering policy. Fears and facts. In van Duyne, P.C., von Lampe, K, Newell, J (eds.), Criminal Finances and Organised Crime in Europe. (pp. 67–104). Tilburg, The Netherlands: Wolf Legal.Google Scholar
  34. Duyne, P.C. van., (2007), Criminal finances and state of the art. Case for concern? In van Duyne, P. C., A. Maljevic, M. van Dijck, K. von Lampe and J. Harvey (eds.), Crime business and crime money in Europe. The dirty linen of illicit enterprise. (pp. 69–98). Nijmegen: Wolf Legal Publishers.Google Scholar
  35. Duyne, P.C. van and de Miranda, H., (1999), The emperor’s cloths of disclosure: Hot money and suspect disclosures. Crime, Law and Social Change, 31(3), 245–271.CrossRefGoogle Scholar
  36. Duyne, P.C. van, Groenhuijsen, M.S. and Schudelaro, A.A.P., (2005), Balancing financial threats and legal interests in money-laundering policy. Crime, Law and Social Change, 43(2-3), 117–147.Google Scholar
  37. Duyne, P.C. van, de Zanger, W., and Kristen, F.H.G. (2014), Greedy of crime-money. The reality and ethics of asset recovery. In P.C. van Duyne et al., Corruption, greed and crime money. Sleaze and shady economy in Europe and beyond. Wolf Legal Publishers, Nijmegen.Google Scholar
  38. Duyne, P.C. van, Harvey J., and Gelemerova, L., (2016), ‘The Monty Python Flying Circus of Money Laundering and the Question of Proportionality’ Chapter 10 in ‘Illegal Entrepreneurship, Organized Crime and Social Control: Essays in Honour of Professor Dick Hobbs’ (ed) G. Antonopolous, Springer, Studies in Organized Crime 14.Google Scholar
  39. Duyne, P.C. van and van Koningsveld, T.J. (2017), The offshore world: nebulous finances. In: P.C. van Duyne et al. (eds.), The many faces of crime for profit and ways of tackling it. Oisterwijk: Wolf Legal Publishers.Google Scholar
  40. Duyne, P.C. van, Harvey J. and Gelemerova, L., (2018a), A ‘Risky’ Risk Approach: Proportionality in ML/TF Regulation. Chapter 15 in C. King, C. Walker J. Gurulé. (eds.) The Palgrave Handbook of Criminal and Terrorist Financing Law, Palgrave, 978-3-319-64497-4, 420951.Google Scholar
  41. Favarel-Garrigues, G., Godefroy, T., and Lascoumes, P., (2011), Reluctant partners?: Banks in the fight against money laundering and terrorism financing in France. Security Dialogue, 42(2), 179–196.CrossRefGoogle Scholar
  42. Ferwerda, J., (2009), The economics of crime and money laundering: Does anti-money laundering policy reduce crime? Review of Law and Economics, 5(2), 903–929.Google Scholar
  43. Ferwerda, J., (2013), The effects of money laundering, part III, chapter 3 in Unger, B. and van der Linde, D. (2013). Research Handbook on Money Laundering. Cheltenham: Edward Elgar Publishing.Google Scholar
  44. Ferwerda, J., Kattenberg, M.A.C., Chang, H.-H., Unger, B., Groot, L.F.M. and Bikker, J.A., (2011), Gravity Models of Trade-based Money Laundering. In Tjalling C. E., (Ed.), Vol. 11 (16). Utrecht.: Koopmans Research Instituten.Google Scholar
  45. Gelemerova, L., (2009), On the frontline against money-laundering: The regulatory minefield. Crime, Law and Social Change, 52(1), 33–55.CrossRefGoogle Scholar
  46. Gnutzmann, H., McCarthy, K. J., and Unger, B., (2010), Dancing with the devil: Country size and the incentive to tolerate money laundering. International Review of Law and Economics, 30(3), 244–252.CrossRefGoogle Scholar
  47. Gordon, R.K., (2011), Losing the war against dirty money: rethinking global standards on preventing money laundering and terrorism financing. Duke Journal of Comparative and International Law, Spring 21(3), 503–568.Google Scholar
  48. Hantke-Domas, M., (2003), The Public Interest Theory of regulation: non-existence or misinterpretation. European Journal of Law and Economics, 15, 165–194.CrossRefGoogle Scholar
  49. Harvey, J., (2004), Compliance and reporting issues arising for financial institutions from money laundering regulations: a preliminary cost benefit study. Journal of Money Laundering Control, 7(4), 333–346.CrossRefGoogle Scholar
  50. Harvey, J., (2005), “Controlling the Flow of Money-Laundering or Satisfying the Regulators”, In van Duyne P.C., von Lampe, K., van Dijck, M. and Newell, J. (Eds.), The Organised Crime Economy: Managing Crime Markets in Europe, Tilburg, The Netherlands: Wolf Legal.Google Scholar
  51. Harvey, J., (2008), Just How Effective is Money Laundering Legislation? Security Journal, 21(3), 189–211.CrossRefGoogle Scholar
  52. Harvey, J., (2014), Asset Recovery Substantive or Symbolic In C. King, and Walker, C. (Eds.), Dirty Assets: Emerging Issues in the Regulation of Criminal and Terrorist Assets: Kent: Ashgate Publishing.Google Scholar
  53. Harvey, J. and Lau, S.F., (2009), Crime-money, reputation and reporting. Crime, Law and Social Change, 52(1), 57–72.CrossRefGoogle Scholar
  54. Harvey, J., (2011), Money Laundering Phantoms, Imagery and Facts. In G. Antonopoulos, Groenhuijsen, M, Harvey, J., Kooijmans, T., Maljevic, A., and von Lampe, K. (Ed.), Usual and Unusual Organising Criminals in Europe and Beyond: Profitable crimes, from underworld to upperworld: Liber Amicorum Petrus van Duyne (pp. 81–104). Antwerp: Maklu.Google Scholar
  55. Hinterseer, K., (1997), An economic analysis of money laundering. Journal of Money Laundering Control, 1(2), 154–164.CrossRefGoogle Scholar
  56. HM Treasury (2016) “Transposition of the Directive on the prevention of the use of the financial system for money laundering or terrorist financing”, London: HM Stationery Office.Google Scholar
  57. Johnson, J., and Lim, D., (2002), Money laundering: has the Financial Action Task Force made a difference? Journal of Financial Crime, 10(1), 7–22.CrossRefGoogle Scholar
  58. Keh, D.I. (1996). Drug money in a changing world: economic reform and criminal finance. Vienna: UNDCP.Google Scholar
  59. Krueger, A.O., (1974), The Political economy of the rent-seeking society, The American Economic Review, June, 64(3), 291–303.Google Scholar
  60. Levi, M,. (2002), Money laundering and its regulation. Annals of the American Academy of Political and Social Science, 582(July), 181–194.CrossRefGoogle Scholar
  61. Levi, M., and Reuter, P., (2006), Money Laundering. Crime and Justice, 34(1), 289–375.CrossRefGoogle Scholar
  62. Masciandaro, D., (1998), Money laundering regulation: the micro economics. Journal of Money Laundering Control, 2(1), 49–58.CrossRefGoogle Scholar
  63. Masciandaro, D., (1999), Money laundering: the economics of regulation. European Journal of Law and Economics, 7(3), 225–240.Google Scholar
  64. Masciandaro, D., (2005) False and Reluctant Friends? National Money Laundering Regulation, International Compliance and Non-Cooperative Countries, European Journal of Law and Economics 20(1), 17–30.CrossRefGoogle Scholar
  65. Masciandaro, D. and Filotto, U., (2001), Money laundering regulation and bank compliance costs: what do your customers know? economics and the Italian experience. Journal of Money Laundering Control, 5(2), 133–145.CrossRefGoogle Scholar
  66. Masciandaro, D. and Portolano, A., (2003), It takes two to tango: international financial regulation and offshore centres, Journal of Money Laundering Control, 6(4), 311–330.CrossRefGoogle Scholar
  67. Masciandaro, D., Takats, E. and Unger B. (2007), Black finance: the economics of money laundering. Cheltenham, UK, Edward Elgar.Google Scholar
  68. Nardo, M., (2008), Organised crime and networking economy: models, features, dynamics and related approaches. Journal of Money Laundering Control, 11(2), 172–178.CrossRefGoogle Scholar
  69. Naylor, R.T., (2003), Towards a general theory of profit-driven crimes. British Journal of Criminology, 43(1), 81–101.CrossRefGoogle Scholar
  70. Pellegrina, L.D. and Masciandaro, D., (2008), The risk based approach in the new European anti-money laundering legislation: A law and economics view. Paolo Baffi Centre Research Paper No. 2008-22.Google Scholar
  71. Pickhardt, M. and Pons, S.J., (2011), The size of the underground economy in Germany: a correction of the record and new evidence from the modified-cash-deposit-ratio approach. European Journal of Law and Economics, 32(1), 143–163.CrossRefGoogle Scholar
  72. Ping, H., (2005) The suspicious transactions reporting system, Journal of Money Laundering Control, 8(3), 252–259.CrossRefGoogle Scholar
  73. Porter, M.E. and van der Linde C., (1995) Toward a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Perspectives Fall, 9(4), 97–118.CrossRefGoogle Scholar
  74. Quirk, P., (1996), “Macroeconomic implications of money laundering”. IMF Working Paper, WP/96/66, Monetary and Exchange Affairs Department, IMF, Washington, DC.Google Scholar
  75. Quirk, P., (1997), Money Laundering: Muddying the Macro-economy. Finance and Development, 7–9.Google Scholar
  76. Reuter, P. and Truman, E.M., (2004), Chasing dirty money: the fight against money laundering. Washington, DC: Institute for International Economics.Google Scholar
  77. Reuter, P. and Greenfield, V., (2001), “Measuring Global Drug Markets. How Good Are the Numbers and Why Should We Care About Them?” World Economics, 4, 159–173.Google Scholar
  78. Rider, B.A.K., (1990), Policing the International Financial Markets: An English Perspective. Brooklyn Journal of International Law, 16, 179–222.Google Scholar
  79. Ross, S. and Hannan, M., (2007), Money laundering regulation and risk-based decision-making. Journal of Money Laundering Control, 10(1), 106–115.CrossRefGoogle Scholar
  80. Rubinstein, A., (1982), Perfect Equilibrium in a Bargaining Model Econometrica, 50(1), 97–109.Google Scholar
  81. Schneider, F., (2006), Shadow economies and corruption all over the world: what do we really know? (Working Paper No. 0617). Department of Economics Johannes Kepler University of Linz.Google Scholar
  82. Schneider, F., (2010), Turnover of organized crime and money laundering: some preliminary empirical findings. Public Choice, 144(3/4), 473–486.CrossRefGoogle Scholar
  83. Schneider, F. and Enste, D., (2000), Shadow economies around the world - size, causes and consequences. Retrieved from Washington: http://www.imf.org/external/pubs/ft/wp/2000/wp0026.pdf
  84. Schneider, F. and Buehn, A., (2013), Estimating the size of the shadow economy: methods, problems and open questions. Studien/pfuschneu/2013/ShadEcMethods_October2013.doc. Retrieved from http://www.econ.jku.at/531/
  85. Schneider, F. and Windischbauer, U., (2008), Money laundering: some facts. European Journal of Law and Economics, 26(3), 387–404.CrossRefGoogle Scholar
  86. Schneider, F., Buehn, A. and Montenegro, C.E., (2010), New Estimates of the Shadow Economies all over the World. International Economic Journal, 24(4), 443–461.CrossRefGoogle Scholar
  87. Sharman, J.C., (2008), Power and discourse in policy diffusion: anti-money laundering in developing states. International Studies Quarterly, 52(3), 635–656.CrossRefGoogle Scholar
  88. Sittlington, S., (2015), What are the Factors that Influence the Effectiveness of Anti-Money Laundering Policy Implementation in the UK: Exploring Money Laundering Crime and Policy? PhD thesis, University of Northumbria at Newcastle. Northumbria University: Newcastle.Google Scholar
  89. Soudijn, M.R.J., (2014), A critical approach to trade-based money laundering. Journal of Money Laundering Control, 17(2), 230–242.CrossRefGoogle Scholar
  90. Sproat, P.A., (2007), An evaluation of the UK’s anti-money laundering and asset recovery regime. Crime, Law and Social Change, 47(3), 169–184.CrossRefGoogle Scholar
  91. Takáts, E., (2011), A theory of “crying wolf”: the economics of money laundering enforcement. The Journal of Law, Economics, and Organization, 27(1), 32–78.CrossRefGoogle Scholar
  92. Tanzi, V., (1996), Money laundering and the international financial system. Washington: International Monetary Fund.Google Scholar
  93. Tanzi, V., (1983), “The Underground Economy in the United States: Annual Estimates, 1930-80” IMF Staff Papers, 30(2), 283–305.Google Scholar
  94. Thomas, J., (1999), Quantifying the black economy: “measurement without theory” yet again? The Economic Journal, 109(456), 381–389.CrossRefGoogle Scholar
  95. Titcomb, J., (2015), Banks fined £3.7bn for rigging foreign exchange markets, The Telegraph, 20 May, http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11617964/Banks-fined-3.5bn-for-rigging-foreign-exchange-markets.html (accessed 6 January 2018).
  96. Unger, B., (2007), The Scale and Impacts of Money Laundering. Cheltenham, UK: Edward Elgar.CrossRefGoogle Scholar
  97. Unger, B., (2013), Can Money Laundering Decrease? Public Finance Review, 41(5), 658–676.CrossRefGoogle Scholar
  98. Unger, B., Rawlings, G., Siegel, M., Ferwerda, J., de Kruijf, W., Busuioic, M., and Wokke, K., (2006), The amounts and the effects of money laundering. Report for the Dutch Ministry of Finance, February.Google Scholar
  99. UNODC (2011): Estimating illicit Financial flows resulting from drug trafficking and other transnational organised crime. Research report. Vienna.Google Scholar
  100. Vaithilingam, S., and Nair, M., (2009), Mapping global money laundering trends: Lessons from the pace setters. Research in International Business and Finance, 23(1), 18–30.CrossRefGoogle Scholar
  101. Verhage, A. and Ponsaers, P., (2009), Power-seeking crime? The professional thief versus the professional launderer. Crime, Law and Social Change, 51, 399–412.CrossRefGoogle Scholar
  102. Von Lampe, K., van Dijck, M., Hornsby, R., Markina, A., Verposte, K., (2006), Organised Crime is…findings from a cross national review of literature. In P.C. van Duyne, et al., The organisation of crime for profit: conduct, law and measurement, Nijmegen: Wolf Legal Publishers.Google Scholar
  103. Walker, J., (1995), Estimates of the extent of money laundering in and through Australia. Paper prepared for the Australian Transaction Report and Analysis Centre. September, Queanbeyan: John Walker Consulting Centre.Google Scholar
  104. Walker, J., (1998), Modelling Global Money Laundering Flows. from http://www.johnwalkercrimetrendsanalysis.com.au/ML%20method.htm
  105. Walker, J., (1999), How Big is Global Money Laundering? Journal of Money Laundering Control, 3(1), 25–37.CrossRefGoogle Scholar
  106. Walker, J., and Unger, B. (2009). Measuring Global Money Laundering: ‘The Walker Gravity Model’. Review of Law and Economics, 5(2), 821–853.Google Scholar
  107. Walter, I., (1989), Secret money. The shadowy world of tax evasion, capital flight and fraud. (3rd edition ed.). London: Unwin Paperbacks.Google Scholar
  108. Yaniv, G., (1999), Tax Evasion, Risky Laundering, and Optimal Deterrence Policy, International Tax and Public Finance, 6(1) 27–38.CrossRefGoogle Scholar
  109. Zdanowicz, J.S., (2009). Trade-based money laundering and terrorist financing”. Review of Law and Economics, 5(2), 856–878.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Petrus C. van Duyne
    • 1
    Email author
  • Jackie H. Harvey
    • 2
  • Liliya Y. Gelemerova
    • 3
  1. 1.Department of Penal LawTilburg UniversityTilburgThe Netherlands
  2. 2.Newcastle Business SchoolNorthumbria UniversityNewcastle upon TyneUK
  3. 3.University of ManchesterManchesterUK

Personalised recommendations