Legal and Economic Factors Determining Success and Failure in the Fight Against Organized Crime: An Empirical Assessment of the Impact of the UN Palermo Convention on Judicial Systems and Financial Intelligence Units
International Law and Economic Development Center; Instituto Tecnológico Autónomo de México (ITAM)
International Law and Economic Development Center
The legal and economic analysis presented here empirically tests the theoretical framework advanced by Kugler, Verdier, and Zenou (2004) and Buscaglia (1997) and moves further by focusing on the identification of the institutional mechanisms that have proven to affect the levels of organized crime within a sample of 69 UN member states that have already signed and ratified the United Nations' Convention against Organized Crime. The paper shows that effective countermeasures directed at high-level public sector corruption, aimed at reducing the capture and feudalization of public sectors in the hands of organized crime, are mainly founded on two pillars: (i) the introduction of more effective decision-making controls over judicial systems in order to reduce the frequencies of abuses of procedural and substantive discretion in investigations, prosecutions, and sentencing and (ii) higher frequencies of successful judicial convictions derived from evidentiary material generated by financial intelligence systems in order to ensure the systematic confiscation of assets in the hands of criminal groups.
An empirical jurimetrics model is for the first time developed for both factors. In this context, prosecutions and effective convictions against the criminal organizations are less driven by incarceration of physical persons and more focused on disrupting the production function of criminal enterprises and therefore dismantling their capacity to expand corruption rings and feudalize States. Deteriorations of institutional performance against criminal enterprises in Afghanistan and Mexico are contrasted with the recent 2001-2007 significant improvements in Colombia and Jordan. These country cases are assessed within the proposed empirical framework in which variables assessing the financial intelligence and judicial capacities of UN member states are for the first time introduced for research purposes.
Keywords: organized crime, feudalization of the state, public sector corruption, judicial corruption, governance, financial intelligence
JEL Classification: C80, D23, K14, K41, K42, K49, K00working papers series
Date posted: February 6, 2008
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