Organized crime, money laundering and legal economy: theory and simulations

Barone, Raffaella; Masciandaro, Donato

doi:10.1007/s10657-010-9203-x

Cited by 51 publications

(40 citation statements)

References 22 publications

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“…Given this value, we can fix the parameter equal to 70% according to the literature, which enables us to indirectly obtain the illegal interest rate , which is equal to 2.8%. This result is consistent with the economic literature (see Unger, 2007; Barone and Masciandaro, 2011).…”

Section: Results Of Fit Calculationssupporting

confidence: 93%

Money Laundering and Corruption: Birds of a Feather Flock Together

2019

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This paper is the first to analyse the three-way relationship among money laundering, antimoney-laundering efforts and corruption. On the one hand, if we assume that the goal of criminals involved in corruption is to minimize the probability of being detected, then corruption represents a demand for money laundering (trigger effect), while money laundering can serve as an effective way to clean the revenue from corruption for re-investment (multiplier effect). On the other hand, criminals can try to maximize the likelihood that anti-moneylaundering activities will be ineffective. Corruption can be an effective device for maximizing this likelihood, as organized crime may corrupt financial institutions-both regulators and regulated firms-in order to prevent crime detection (accelerator effect). The paper proposes a novel theoretical framework for these interconnections, which is then used to simulate the three effects in 101 countries for the period 1990 to 2040.

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Section: Results Of Fit Calculationssupporting

confidence: 93%

Money Laundering and Corruption: Birds of a Feather Flock Together

2019

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“…Preferential treatment by bureaucrats to select individuals, based on a variety of criteria is also a form of corruption. In addition, money laundering, drug trafficking and organized crime (Barone & Masciandaro 2011) are also illegal activities that may have significant impacts on economies.…”

Section: Literature Reviewmentioning

confidence: 99%

Corrupting activities and economic development

Anderson

2015

World Journal of Entrepreneurship, Management and Sustainable Development

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Purpose – The purpose of this paper is to explore the relationships of different types of corruption and selected economic measures that appear to contribute to a country’s sustainable economic development. Design/methodology/approach – The research used selected data from the World Economic Forum Executive Opinion Survey on corruption activities (Irregular Payments and Bribes, the Diversion of Public Funds, Organised Crime, and Favouritism in Decisions of Government Officials) and Ethical Behaviour of Firms. The economic data (FDI, GDP, GDP Growth and Capital Formation among others) is from the World Bank database. A series of statistical models were developed to examine the relationships among different types of corruption and a country’s economic development. Findings – The findings are mixed, showing that some types of corruption have greater negative impact on specific aspects of economic development. Research limitations/implications – The research is limited by the availability of data from reliable sources and the availability of data on a limited number of corruption activities. Only four aspects of corruption are examined in this paper. Only selected aspects of a country’s economy were examined. The variables analysed in the study were not available for each of the 179 countries. Practical implications – A country may learn the types of corrupting activities that must be controlled to aid in the targeted growth of specific economic development, such as Direct Foreign Investment. Originality/value – This study builds on previous work by Anderson (2012, 2013) that used Transparency International’s Corruption Perception Index (CPI) as a global measure of corruption. This study, in contrast, uses the results of the World Economic Forum Executive Opinion Survey, to indicate the perceived level of different types (components) of corruption. By using more specific measure of corruption, there is a better understanding of the relationships between corruption and economic development.

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“…The need for international cooperation in this improvement is supported by Ferwerda (2009). On the lines of assessing the effectiveness of AML regime, Barone and Masciandaro (2011) estimated the public benefit for Europe from a drastic reduction in the money laundering multiplier effect. They found the public benefits would outweigh the cost of AML regulations.…”

Section: Aml Framework and Its Effectivenessmentioning

confidence: 99%

A review of money laundering literature: the state of research in key areas

Tiwari

Gepp

Kumar

2020

PAR

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Purpose:The purpose of this study is to review the literature on money laundering and its related areas. The main objective is to identify any gaps in the literature and direct attention towards addressing them.Design/Methodology/Approach: A systematic review of the money laundering literature was conducted with an emphasis on the Pro-Quest, Scopus and Science-Direct databases. Broad research themes were identified after investigating the literature. The theme about the detection of money laundering was then further investigated. The major approaches of such detection are identified as well as research gaps that could be addressed in future studies. Findings:The literature on money laundering can be classified into the following six broad areas: (i) anti-money laundering framework and its effectiveness, (ii) the effect of money laundering on other fields and the economy, (iii) the role of actors and their relative importance, (iv) the magnitude of money laundering, (v) new opportunities available for money laundering and (vi) detection of money laundering. Most studies about the detection of money laundering have focused on the use of innovative technologies, banking transactions, or real estate and trade-based money laundering. However, the literature on the detection of shell companies being explicitly used to launder funds is relatively scarce.Originality/Value: This paper provides insights into an area related to money laundering where research is relatively scant. Shell companies incorporated in the UK alone were identified to be associated with laundering 80 billion pounds of stolen money between 2010 and 2014. The use of these entities to launder billions of dollars as witnessed through the laundromat schemes and several data leaks clearly indicate the need to focus on illicit financial flows through such entities.

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Organized crime, money laundering and legal economy: theory and simulations

Abstract: Organized crime, Money laundering, Shadow economy, G28, F30, F33, F42, K14, K23,

Cited by 51 publications

References 22 publications

Money Laundering and Corruption: Birds of a Feather Flock Together

Money Laundering and Corruption: Birds of a Feather Flock Together

Corrupting activities and economic development

A review of money laundering literature: the state of research in key areas

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