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An Economic Investigation of Confiscation as a Tool against Money Laundering

Author

Listed:
  • Ricardo Azevedo Araujo

    (Universidade de Brasília (UnB), Brazil)

  • Tito Belchior Silva Moreira

    (Universidade Católica de Brasília (UCB), Brazil)

Abstract

In this paper the efficiency of the confiscation as a tool against organized crime is studied by using a general equilibrium model that considers the existence of a representative criminal organization that generates profits that need to be laundered. The main result of the paper shows that if on one hand confiscation diminishes the optimal amount of money laundered on the other it increases the fraction of resources allocated to the criminal activity. This result suggests that confiscation has to be connected to further repressive measures in other to be an efficient tool against organized crime

Suggested Citation

  • Ricardo Azevedo Araujo & Tito Belchior Silva Moreira, 2012. "An Economic Investigation of Confiscation as a Tool against Money Laundering," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 13(2), pages 271-280.
  • Handle: RePEc:anp:econom:v:13:y:2012:i:2:271_280
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    File URL: http://www.anpec.org.br/revista/vol13/vol13n2p271_280.pdf
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    References listed on IDEAS

    as
    1. repec:ebl:ecbull:v:11:y:2007:i:3:p:1-5 is not listed on IDEAS
    2. Tito Belchior Siva Moreira, 2007. "A Two-Period Model of Money Laundering and Organized Crime," Economics Bulletin, AccessEcon, vol. 11(3), pages 1-5.
    3. Araujo, Ricardo Azevedo & Moreira, Tito Belchior S., 2004. "A dynamic model of production and traffic of drugs," Economics Letters, Elsevier, vol. 82(3), pages 371-376, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Money Laundering; Organized Crime; Confiscation;

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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