Much of the literature on the link between opportunity and crime focuses either on industrialized countries with strong institutions or on rural conflicts in developing economies. There is good reason to expect the link between job loss and violent crime to be stronger in poorer economies with weaker institutions, even in places like Mexico with well-developed urban labor markets, than in advanced economies. In lower-income settings, the social safety net is often weak. Criminal justice institutions typically lack resources and struggle to prevent corruption.
Significantly, criminal organizations may provide extensive employment opportunities, adding to their appeal and lowering the job search costs for unemployed people. At the same time, it is not clear that findings about rural conflict—which differs in many fundamental ways from urban crime—can be extrapolated to these settings.
Trade competition in the US market between Mexico and China has been an important driver of local labor market conditions in Mexico, generating considerable popular and policy interest. Our study concludes that if Chinese exports to the United States had not risen significantly during —10, the increase in drug-related homicides in Mexico in our sample—totaling about 6, in and more than 20, in —would have been about 27 percent lower.
Importantly, the impact is concentrated in municipalities with a transnational drug gang presence. In contrast, there is no impact on overall and drug-related homicides in municipalities where no known drug trade operations existed initially. This underscores the role of criminal organizations in linking labor market conditions and violent crime. We provide evidence that, in some parts of Mexico, young people are moving away from legitimate employment toward criminal activity because changes in the local labor market have made it more lucrative to traffic drugs. Cocaine trafficking, which is highly lucrative—and whose destination is overwhelmingly the United States—involves extensive mobilization of lookouts, the largest group of drug trafficking organization employees.
These findings underscore the value of a Gary Becker—style approach that views violent criminality through a lens that includes economic incentives. In the coming years, countries with weak institutions may well be those hit hardest by workers displaced as a result of economic integration and technological change, with criminal and other actors outside traditional institutional structures poised to exploit such shocks to their advantage.
These countries will need a combination of national and international measures to fight these challenges successfully. Where corruption occurs at major border crossings, it requires more sophisticated and financially costly schemes that commonly involve cooperation between several border guards, or more complex collaboration between teams of border guards, customs officers and sea-port employees Centre for the Study of Democracy At smaller border crossings, corruption more often involves doing favours for friends and family.
In some EU countries, for example, direct contact between border guards and bribe-payers is frequently facilitated by some sort of informal social network that develops in casual places like local bars, coffee shops, gyms or schools which provide the opportunity for criminals and border guards to meet in a conducive atmosphere. In addition, in such settings, border guard forces are organised in more cohesive, smaller and tighter units where corruption may be more difficult to conceal when it involves individual corrupt officers.
In such units, border guard forces are either generally corruption-free, due to strong team ethics, or are institutionally corrupt, with the whole team engaging in corruption Centre for the Study of Democracy Indeed, the development of corrupt networks and collusion affecting an entire local customs office is not uncommon. Staff transferred to remote offices permeated by corruption find it difficult to resist participation and expose themselves to peer pressure and group intimidation if they do, which undermine their working conditions and well-being Ferreira, Engelschalk and Mayville In addition, in several cases, it is a family tradition that members of different generations or spouses work in the same agency, which also provides safe informal networks for corruption to develop inside the organisation.
Border and customs officials are especially vulnerable to corruption due to the very nature of their work. In particular, border officials with customs powers enjoy particularly wide discretionary powers. They often have sole authority and responsibility to make various important decisions on the level of duty or taxes or admissibility of imports and exports, in an environment where supervision and accountability are difficult.
In many cases, the value of the shipment provides further incentives to bribe: they make decisions over extremely high value shipments, which makes it worth bribing them with a lot of money. In addition, compared to other bureaucrats, law enforcement officers deal with especially high number of transactions on the border which provide more opportunities for corruption De Wulf and Sokol Border guards enjoy comparatively fewer discretionary powers than customs officials.
And they have fewer opportunities to extort bribes from legitimate businesses and individuals than customs officers who can use the complexities and loopholes of a customs code and administrative procedures to slow down border crossing processes.
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There are three major areas where border guards may become involved in extortion: i migration control; ii schemes where they become complicit with customs officials who extort money from legitimate companies and private persons; and iii administrative corruption regarding public contracts Centre for the Study of Democracy They also have frequent face-to-face interactions with members of the trading community who have a strong incentive to influence their decisions McLinden and Durrani ; De Wulf and Sokol Even with modern, more sophisticated clearance procedures, direct contact between traders and customs officials cannot be avoided while goods are being physically inspected.
Corruption risks are particularly high when customs checks are not being conducted by a team but by an individual officer, especially in small offices and during the night and weekend shifts Ferreira, Engelschalk and Mayville This unique combination of administrative monopoly and broad discretionary power over valuable goods makes customs and border officers, probably more than any other type of law enforcement agents, prone to corruption. The combination of poor pay, difficult working conditions and little probability of detection provides both incentives and opportunities for corruption McLinden and Durrani In addition, the difference between a border guard or customs officer salary and the potential income from corruption will always be substantial and likely to fuel rent-seeking behaviour among border staff.
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Given the huge potential to extract bribes, in some countries, positions in customs and border guard services can be bought by corrupt individuals for rent-seeking purposes. In the EU, there are also wide salary disparities among personnel working at the external borders of the EU. Such disparities are seen as a factor that fuels both petty corruption and more serious corruption schemes Centre for Democratic Studies Border and customs officials ensure that a number of security and customs procedures foreseen in the national legislation are followed.
Non-transparent, burdensome rules and procedures constitute vulnerabilities that can breed corrupt behaviour. At the same time, high tariffs and complex regulations offer significant incentives for traders to reduce import charges and speed up transactions. Officers enjoy some discretion in interpreting the law and neglecting some aspects of the law as some laws are unenforceable or only partly enforceable Heyman and Campbell Meanwhile, those transporting legal products across the border often find it easier to simply bribe customs officials than comply with burdensome and complicated import procedures, forms and tariffs.
This has made border officials especially susceptible to kickbacks Flores Border control authorities also have the mandate to prevent the import of illegal goods drugs, weapons, alcohol and cigarettes , persons and wildlife. These lucrative activities often involve organised crime syndicates that do not hesitate to resort to bribery, intimidation and violence to facilitate their illegal transactions. Given the high financial stakes, rent-seeking opportunities are difficult to staunch Ferreira, Engelschalk and Mayville Border control authorities are often viewed by citizens as one of the most corrupt government institutions in many countries.
However, as already mentioned, there is little data on the scale of corruption in border control agencies in general, and most figures and assessments are limited to assessing the prevalence of corruption in customs. The Helpdesk has also not found any study comparing levels of corruption in border regions with other regions. Customs continues to be perceived among the most corrupt of government institutions in many countries McLinden and Durrani In the United States, for instance, the US Customs and Border Protection agency has the highest per capita record of law enforcement officers being arrested for corruption Bennett There are some regional variations: in sub-Saharan Africa, this figure rises to This is especially true for low income countries.
In Africa, a study looking at corruption of customs officials at transit points along the northern corridor in Kenya, Uganda, Tanzania, Rwanda, Burundi and Democratic Republic of Congo found that delays and high taxations are perceived to be major constraints to cross-border business and one of the greatest opportunities for bribery.
Incidence of corruption was particularly prevalent in declaration and valuation processes. Virtually all customs processes are vulnerable to corruption as traders have strong incentives to evade high tariffs or circumvent burdensome rules and procedures to speed up the clearance of goods. Corruption can permeate: the assessment of origin, value and classification; cargo examination; the administration of concessions, suspense, exemption and drawback schemes; post-clearance audit; transit operations; passenger processing; the issuing of various licences and approvals.
More recently, corruption can also facilitate access to authorised or preferred trader schemes which confer special privileges to selected traders McLinden and Durrani Corrupt behaviour can range from corrupt individuals bad apples to more systemic forms of corruption involving the development of corrupt networks within the customs administration. Many observers note that corruption in customs is often organised into networks, with members of the networks distributing the profits from corrupt practices with colleagues and superiors Ferreira, Engelschalk and Mayville ; De Wulf and Sokol The author also differentiates between four major forms of corruption De Wulf and Sokol :.
Bribery can take the form of petty bribery, which generally involves junior staff and typically includes the payment of money to secure or facilitate the issuance or processing of licences and clearances. Grand forms of corruption typically involve more senior officials. Bribery schemes can also involve the payment of money to alter or reduce duty or taxation liabilities, ensure that officials turn a blind eye to illegal activities and kickbacks to ensure access to lucrative exemption from normal administrative formalities.
In the customs context, such forms of corruption can affect: the selection, transfer or promotion of individuals or groups on the basis of an existing relationship rather than on merit; the awarding of lucrative customs appointments; and the allocation of scarce government resources to individuals on a non-merit basis. Nepotism is more prevalent in the customs administrations of microstates or in border posts that are geographically remote from headquarters. When the civil service system does not promote transparent, competitive and merit-based recruitment of customs staff, it is it is not uncommon that lucrative positions in customs be sold for their potential to extract bribes Ferreira, Engelschalk and Mayville Misappropriation in customs can occur at the individual, group or organisational level and include a wide range of behaviours such as theft, embezzlement, falsification of records and fraud.
Although also present in developed countries, it is a common feature of the customs administrations in many developing countries in which administrative controls or checks and balances are weak and where systems to ensure appropriate supervision and audit of financial transactions are not well developed. Using evidence from African ports, Sequeira and Djankov suggest that firms respond differently to these types of corruption, with collusive forms of corruption associated with higher usage of the corrupt ports, while coercive corruption is associated with reduced demand for port services see below.
Corruption in border guard services receives less attention in the literature and few papers focus on the sub-Saharan region. This analysis of forms of corruption in border guard services is mainly based on a Centre for the Study of Democracy study of anti-corruption measures in EU border control.
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Corruption mechanisms at the border may involve bribery schemes where border officials are in direct contact with the bribe payer or more complex schemes involving intermediaries who are in direct contact both with bribe-payers and with border guards. Border guards can collude with customs, local police, criminal police or private companies to carry out more complex corruption schemes, while intermediary bribe-payers in more complex corruption schemes may include lawyers, informants, former border guards and NGOs Centre for the Study of Democracy Similar to corruption forms identified in customs, the research categorises corruption practices in border guard services across the EU into three main groups.
As in customs services, petty forms of corruption relate to accepting or extorting small bribes to speed up routine border crossing procedures, relax strict surveillance, waive minor irregularities or seek payment for allowing the passage of known or wanted individuals. Small bribes are paid to facilitate the smuggling of consumer goods, such as cigarettes and petrol, especially where there is a significant price differential across a border or to speed up the border passage of vehicles and persons, particularly in peak seasons Centre for the Study of Democracy Petty corruption can facilitate the illegal border crossing by land, sea or air, the issuing and using of fraudulent or fraudulently obtained travel documents.
The senior officials then inform their colleagues at checkpoints, which can result in compromising an entire border unit and the initial bribe trickling down the various layers of the border control authority. This form of collusion can also lead to extortion practices, as documented in East Africa where corrupt officials benefitted from intercepting migrants by introducing checkpoints OECD Administrative corruption practices within border guard institutions are similar to the administrative corruption affecting other public institutions and can involve the manipulation of procurement tenders, extracting kickbacks from service operators in the border area and appointment or promotion of officers based on nepotism Rusev It is typically well organised and typically involves the participation of higher levels of management or leadership Centre for the Study of Democracy Organised crime related corruption can take many forms, including the selling of information to criminal groups, facilitating the passage of illicit goods and migrants and obstructing investigations.
In the EU, smuggling cigarettes, fuel, alcohol, drugs, stolen vehicles or irregular migrants are cross-border activities that are frequently linked to organised crime. While cash controls usually involve customs administrations, border guards can also facilitate the movement of large amounts of cash for money laundering purposes.
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There are some examples where border guards have been used as couriers by money-launderers to smuggle cash from North America to Mexico. In some cases, criminal groups go to great lengths to identify vulnerable officials who are likely to respond to a corrupt transaction or to infiltrate law enforcement or border protection agencies, using bribery or intimidation. For example, some criminal organisations are known to gather intelligence on inspectors at ports of entry to identify those who have a drinking, gambling, financial or other problem that can mean they can be easily compromised. In some cases, they can collude with officials in government agencies in conspiracies to smuggle migrants OECD Border guards can also allow the entry and exit of individuals for whom an arrest warrant has been issued, who are on probation, or are subject to some sort of a travel ban.
They can also provide false alibis to organised criminals by falsifying records or entering information into the system showing that a criminal has left and re-entered the country on certain dates. This type of misconduct can result in obstructing an investigation Centre for the Study of Democracy Political corruption can also affect border guard forces in various ways.
It can take the form of amending regulations so that the new regulations serve the interests of certain individuals, groups or companies. Political patronage can also permeate border guard services. In some countries, the heads of border guard forces may be political appointees who have been rewarded by the ruling party for their political support by a position where they can potentially benefit from corrupt practices Centre for the Study of Democracy Another form of political corruption can develop at the local level, particularly in small towns.
In the EU, particularly in small towns along the external land borders of the EU, complex corruption networks may involve local businesses engaged in the cross-border trafficking of goods. Local politicians associated with them can gain political prominence or benefit from this association for personal financial gain or to promote local projects that help raise their political status Centre for the Study of Democracy At another level, residents of border regions and towns often develop close family, social, political and business ties on both sides of the border, creating intimate interactions that can facilitate various forms of corruption.
These connections encourage under-enforcement of laws and the tacit allowance of illegal activities Heyman and Campbell The activities of such local bosses are often tolerated by high level political actors because they bring cash and votes in a region characterised by clientelistic politics Heyman and Campbell There are forms of corruption more specifically targeted to women: a border official could request sexual favours in exchange for allowing a woman into the country.
Women can also use lighter forms of flirting to obtain preferential treatment at the border.
According to experts consulted within the framework of this query, organised crime groups also use prostitutes who have sex with an officer who is then blackmailed with videos or photos to facilitate smuggling for the crime group. There are a number of methodological challenges associated with assessing the costs of corruption in general and few studies specifically looking at the costs and impact of border related corruption.
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Where such studies exist, they also typically focus on the cost of corruption in customs. While not specifically looking at border related corruption, there is a large body of evidence suggesting that corruption is likely to adversely affect long-term economic growth through its impact on investment, taxation, public expenditures and human development. This economic impact of corruption has been documented to a certain extent for customs corruption, which is perceived as a bigger threat in terms of its impact on lost budget revenue and business Rusev In general terms, the World Bank lists a number of negative effects of corruption within customs administration, including a reduction in public trust and confidence in government institutions, significant revenue leakage, a reduction in the level of voluntary compliance with customs laws and regulations by the business sector and the maintenance of unnecessary barriers to international trade and economic growth, among others De Wulf and Sokol While he failed to indicate how this amount was estimated, such declarations confirm that business actors perceive corruption at borders as a major constraint to doing business in a country Sahara Reporters As mentioned above, border corruption has a distortive impact on regional trade and revenue collection as firms adjust their behaviour to the scale, cost and form of corruption.
A comparative study on trade and corruption costs in the competing ports of Durban and Maputo shows that the choice of port is largely determined by the interaction between transport and corruption costs at each port. Coercive forms of corruption are associated with reduced demand for port services, with firms travelling further, and in some cases almost doubling their transport costs just to avoid this type of corruption at a port.
Collusive corruption, which reduces costs is, however, associated with higher usage of the corrupt port services but a significant reduction of customs revenues Sequeira and Djankov The study also shows how corruption can affect the relative cost of imports by determining the total cost of using port services and clearing goods through customs. It suggests that firms adjust their decision on whether to source inputs in domestic or international markets accordingly. Cost-reducing collusive corruption is associated with a higher proportion of imported inputs, whereas cost-increasing coercive corruption is associated with a higher proportion of domestic inputs.
This indicates that firms respond to different types of corruption by organising production in ways that increase or decrease demand for the public services. Finally, the study shows that both forms of corruption can affect economic activity beyond the immediate cost of the bribe. Avoiding coercive corruption at port services through extorting bribes increases congestion and transport costs in the region by generating imbalanced flows of cargo along the transport network. Collusive corruption is on the other hand associated with significant tariff revenue loss for the government, equivalent to a 5-percentage point reduction in the average nominal tariff rate Sequeira and Djankov Trafficking of drugs, natural resources, weapons, stolen vehicles or even consumer goods such as oil, alcohol or cigarettes also rely on smuggling and on avoiding investigation, which is facilitated by corruption, including border corruption.