EXPANDING ILLICIT ECONOMY

Criminal activity must be understood as a market, an economic sector. Everyday crime is exercised by rational actors, motivated by incentives. These activities involve the sale of products and services mediated by crimes such as theft, smuggling, trafficking, forgery, theft, embezzlement, reception, corruption, robbery, among others. These crimes are committed by criminal illicit trade networks and can be against people, companies, the environment and governments.

Together, these crimes fuel illicit, national and transnational markets, which form a profitable global illicit economy, generating a series of negative externalities, such as the epidemic of violent crimes, work analogous to slavery, damage to health and the environment. This is the contemporary expression of crime: the formation of illicit, local and transnational markets, and the consequent expansion of the illicit transnational economy.

The economic potential of crime has already been highlighted by the 1992 economics Nobel economist Gary Becker in 1968: “In general, “crime” is an economically important activity or “industry”, despite the almost total neglect of economists”.

 The illicit economy has been booming for the past 30 years, fuelled by the high profitability afforded to criminal networks that enable the continued supply of illegal products and services – such as drug trafficking, wild animals or people – or licit products illegally manufactured (counterfeited/adulterated) or diverted to illicit chains – such as tobacco, weapons, pesticides, electronics, food, clothing, audiovisual, fertilizers, automobiles, drinks, medicines and fuels – as well as clandestine services of cable TV, electricity and gas installation, with guaranteed or growing demand.

The expansion of these illicit markets is one of the main contemporary risks for democracies, especially in developing countries. Gangs replace companies, making sectors unfeasible and forming criminal networks that operate through violence and corruption of public and private agents as a form of dispute and “regulation” of markets. 

In the last decade, international economic and security organizations such as the Organization for Trade and Economic Development (OECD), Interpol, Europol and UNODC (United Nations Office on Drugs and Crime), started to monitor the problem and create forums for the development of efficient strategies to control the problem, in the sense of normative updating of criminal justice systems and operational modernization, such as information integration with the private sector and between countries. The control of the “crime industry” requires a criminal justice system capable of creating discouragement, imposing a cost on crime, a cost that needs to be compatible with the profits obtained from the offer of illicit products.

 The Census of Illicit Markets is part of this process as a permanent structure for quantitative and qualitative monitoring of illicit markets in São Paulo and the Triple Border region. Our goal is to detect and understand the evolution of the problem and, mainly, to provide reliable technical parameters for the evaluation and development of public policies or private control strategies, operating with public, private and scientific community partners.