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

  • Friedrich Schneider
  • Raul Caruso

The financial means of international terror and transnational organized crime organizations are analyzed. 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 transnational 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.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Economics of Security Working Paper Series with number 52.

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Length: 34 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diweos:diweos52
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  12. Konstantinos Drakos, 2010. "The determinants of terrorist shocks' cross-market transmission," Journal of Risk Finance, Emerald Group Publishing, vol. 11(2), pages 147-163, February.
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