Economic Crimes

Determinants of Economic Crimes

Economic Development & Corruption

• A high living standard can result in a better

compliance with the law, and,
consequently, the incentives for paying
bribery and also the shadow and money
laundering activities are much reduced.
• The highest rates of illegal economic
activities and the highest rates of
corruption are found in the developing and
transition countries, while in the countries
with high incomes there are found lower
rates of corruption and shadow economy.
Economic Development & Corruption

• A high living standard can result in a better

compliance with the law, and,
consequently, the incentives for paying
bribery and also the shadow and money
laundering activities are much reduced.
• The highest rates of illegal economic
activities and the highest rates of
corruption are found in the developing and
transition countries, while in the countries
with high incomes there are found lower
rates of corruption and shadow economy.
Economic Development & Corruption

• Living standards can be indicated by the

economic growth of a country
• The gross domestic product (GDP)
represents the market value of all the
goods and final services produced
within a certain period of time in an
economy.
Economic Development & Corruption
• Torgler (2004) conclude that “if the
financial situation of a household is bad,
the tax payments could be considered as
a hard restriction of their possibility set,
which could result in the diminution of
the tax honesty”.
• The intensity of corruption diminution
due to the increase of the GDP per capita
is more obvious in the developing
countries than in the developed ones.
Economic Development & Corruption
• a high level of wealth could result in the
increase of the possibilities to get
benefits increasing thus the corruption
level. (Caselli and Michaels 2013)
Economic Development & Corruption
Economic Development & Shadow Economy

• Referring to the shadow economy,

several studies confirm that a higher
level of the economic growth of a
country generates a better capacity of
tax payment and collection and a higher
demand of public goods and services
(Chelliah 1971; Torgler 2004; Torgler and
Schneider 2009)
Economic Development & Shadow Economy

• the highest levels of the illegal economic

activities are found in the developing
countries and countries in transition
stage (Alm et al. 2004; Medina and
Schneider 2018; Schneider and Klingmair
2004; Schneider 2015)
• the richer a country is, the lower is the
tendency of the its citizens to get
involved with shadow activities. Achim,
Borlea, Găban, and Cuceu (2018a)
Economic Development & Shadow Economy
 Economic Development & Money
Laundering
• The developing countries are much more
vulnerable against money laundering
crimes because of the existing legislative
gaps of the developing process of the
financial sector, of privatization, or of the
creation of the securities market. Kroll
(1994)
Economic Development & Money
Laundering