The (Hidden) Financial Flows of Terrorist and Organized Crime Organizations: A Literature Review and Some Preliminary Empirical Results

44 Pages Posted: 5 Apr 2010

See all articles by Friedrich Schneider

Friedrich Schneider

Johannes Kepler University Linz - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Abstract

The financial means of international terror and organized crime organizations are analysed. First, some short remarks about the organization of international terror organizations are made. Second and in a much more detailed way a literature review is provided about the financing of terrorist and organized crime organizations, their sources and the various methods they use. Third, an attempt is made to estimate the financial means of terror organizations with the help of a latent estimation approach (MIMIC procedure). The figures show that Al Qaeda and other terror organizations have sufficient financial means. Fourth, some remarks are made about the negative effects of terror on the economy in highly developed countries and some strategies are presented to combat (the financing) of terrorism.

Keywords: financial flows of terrorist organizations, Hawala banking, money laundering, organized crime, kinds of terrorist financing

JEL Classification: K42, H56, O17

Suggested Citation

Schneider, Friedrich G., The (Hidden) Financial Flows of Terrorist and Organized Crime Organizations: A Literature Review and Some Preliminary Empirical Results. IZA Discussion Paper No. 4860, Available at SSRN: https://ssrn.com/abstract=1584191

Friedrich G. Schneider (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

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Austria
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+43 732 2468 8208 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Institute for the Study of Labor (IZA)

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