Economics of Organized Crime (with some examples

Transcript:Economics of Organized Crime (with some examples:
Economics of Organized Crime (with some examples from the Balkans) Economics of Bizarre Phenomena Krassen Stanchev, Sofia University, chairman of IME Board, and CEO of KC2 LTD (stanchev@ime.bg) Partners' Academy September 19, 2024 1 Working definitions and assumption - 1 Intentional and repeated over time production and supply of criminalized goods and services (Vito Tanzi, “Corruption: Arm’s-length Relationships and Markets”, in: Fiorentini, G. i Pelzman, S.M (eds.): The Economics of Organised Crime, Cambridge: Cambridge University Press, 1995.) Governments and traditions define what is “crime”. Like all professions, the supply of criminalized goods and services may require high and low qualification, ”white” and “blue” color criminal activity. “White” collar would presuppose a certain degree of refinement of knowledge and skills, certain “professionalism” on the producer and supplier side. Two ways to look at those: from historic and from market perspective. Partners' Academy September 19, 2024 2 Not so profound definitions of OC Brittanica: ”complex of highly centralized enterprises set up for the purpose of engaging in illegal activities. Such organizations engage in offenses such as cargo theft, fraud, robbery, kidnapping for ransom, and the demanding of “protection” payments. UNTOC (2003) – no definition OC-INDEX (https://ocindex.net) “illegal activities conducted by groups or networks acting in concert, by engaging in violence, corruption or related activities in order to obtain, directly or indirectly, a financial or material benefit, carried out both within a country and transnationally. CORRUPTION (?) refers to government involvement (Jan Teorell: https://www.gu.se/sites/default/files/2020-05/2007_5_Teorell.pdf ALIPIEV (2012 - https://procon.bg/system/files/views_007.pdf) OC – not necessarily complex, or severe crime act. But “typical for any market-based society”. Partners' Academy September 19, 2024 3 Bulgaria’s Penal Code (Art. 93/20) An "organized criminal group" is a structured permanent association of three or more persons for the purpose of committing in concert, in the country or abroad, offences punishable by more than three years' imprisonment. The association might also be structured without any formal division of functions between the participants, duration of participation or developed structure.” Partners' Academy September 19, 2024 4 Low and High Entry Barrier on Market for Organized Crime (Examples) Low entry costs: Credit, Prostitution, Smuggling, “Money laundering”. Border zone between high and low entry costs: Industrial counterfeit of goods, money, documents and credit cards, etc. High entry costs: Supply of services requiring systemic and professional use of violence, Industrial production and supply of drugs, weapons, etc., Overcoming juridical barriers (including state boundaries), which is defined as