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When illicit trade is allowed to flourish, it spawns a culture of impunity. Organized crime and illicit economies are increasingly prominent sources of political corruption, as criminal networks pour money into parties and forge alliances with officials and their intermediaries. Transnational organized crime generates an estimated $870 billion in annual revenue, and about one third of organized crime groups surveyed by the United Nations have political influence at the local level, according to a report published in 2016 by the Global Initiative against Transnational Organized Crime. Transactional corruption of law enforcement and public officials diverts resources from the state, and increasingly, in countries with poor institutions, the receipt of a bribe is perceived as a right of office - while payment of a bribe is seen as a cost of doing business. This has generated distrust in politicians, distorted markets, undermined public infrastructure, and disengaged citizens. During the 2014 regional elections in Peru, for example, the Ministry of the Interior announced that 124 candidates had links to drug traffickers - yet, 14% of those candidates were ultimately elected, according to the Global Initiative against Transnational Organized Crime’s 2016 report. Crime and corruption are further facilitated by the decline of stigma associated with illegal acts; illicit activity is regularly used to gain political power, or to buy legitimacy with the public. A lack of law enforcement, penalties, or any deterring government presence at all runs the risk of increasing complicity over time. In Afghanistan, for example, the lack of a state presence is thought to be the most important contributing factor to the rampant opium production in the southwestern provinces of Helmand, Kandahar, Nimruz, and Farah, according to the Global Initiative against Transnational Organized Crime’s report. In many areas of Afghanistan, the Taliban has taken advantage of the lack of state security to become the security provider itself, and its drug-related income - from both smuggling and protecting fields from police scrutiny - has been estimated to be as much as $155 million annually, according to the report. The high-level business and government officials who enable criminal behaviour through neglect or complicity are exacting heavy cost on the rest of us; the annual cost of corruption in the form of bribery and theft amounts to about $3.6 trillion, according to a UN estimate published in 2018.

Corruption and Impunity

KEY TRENDS

Illicit Economy