Political economy of crime and lawlessness

IN spite of the fact that lawlessness has a significant impact on economic development, a rigorous analysis of the linkages between the two remains conspicuous by its absence in general economic literature. The only redeeming feature of the literature concerned with the identification of sources of economic growth is that during the last half of the previous century, empirical research has come to focus on the relationship between political instability (one obvious manifestation of law and order situation) and economic growth.
Paradoxically, however, the issue of linkage between law and order and economic development has generally remained neglected, both in theoretical and empirical literature concerned with the identification of sources of development.
Bangladesh could not reap benefits from global economic linkage possibly because of its internal political turmoil. No in-depth and systematic study of the impact of lawlessness on Bangladesh's economy has been undertaken so far. Stray articles have appeared in newspapers and magazines highlighting adverse impact of disturbances on local trades and industries, but the problem has not been examined in any coherent way from the standpoint of national economy as a whole.
Crime is a major problem of national and, in some cases, international dimensions. Certain forms of crime can hamper the political, economic, social and cultural development of peoples and threaten human rights, fundamental freedoms, peace, stability and security. In certain cases it demands a concerted response from the community of nations in reducing opportunities for committing crime, and addressing the relevant socio-economic factors, such as poverty, inequality and unemployment.
Crime prevention and criminal justice should be considered in the context of economic development, political systems, social and cultural values and social change, as well as in the context of new international economic order. The criminal justice system should be fully responsive to the diversity of political, economic and social systems and to the constantly evolving conditions of society.
One would find reference to main impediments in the way of achieving goals of effective international co-operation in the prevention of crime. Such impediments arise because of variations in legal systems, differences in the stages of economic development, changes in social environment, and newly emerging forms of crimes. There are many reasons behind the need for adoption of concerted effort to curb crime, basic factor being the threat posed by organised crime and terrorism.
The organisational structure of terrorist or crime bodies is indeed their strength, and multidisciplinary approach necessary to combat them is not a part of the traditional law enforcement culture. Actually, a combination of traditional law enforcement personnel, companies and securities regulators, and financial and scientific experts is necessary to identify individual members of organised crime structures.
Advances in communications and technology are such that national boundaries have, in many cases, ceased to provide any impediment to unlawful activities. The growth of multinational corporations, including financial institutions, has provided even greater means of shifting money and obfuscating the evidentiary trail.
Developing countries that, for their own protection and development, impose currency and exchange controls, are likely to find their financial systems targeted by organised fiscal crime. As a result of organisational structure and concomitant pooling of talent, organised crime and terrorism have become more innovative. If one area of activity is curbed, new and equally profitable areas of unlawful activity are quickly found.
Apart from its national dimensions, the problem of crime now has serious international dimensions. Crime prevention, being a global phenomenon, should not be confined to common criminality but should also deal with nationally harmful crimes, including economic crimes, environmental offences, illegal drug trafficking, terrorism, and other unlawful activities that affect development.
Illicit drug money strengthens the economic power of criminals and gives them the power to corrupt political systems. Organised crime syndicates, including Italian and Russian mafias, Japanese yakuza, Chinese triads and Colombian drug cartels, all laundered money through deposits in unregulated banks or by buying up real estate and companies. Because the money is coming from crime it gives to criminal organisation's businesses a competitive advantage against legitimate businesses. So the legitimate economy is definitely threatened by organised crime. No one really knows how much money is being laundered.
Economic crimes and their social consequences dwarf those of inter-personal violence and crimes against property in as much as they entail losses of millions to the government and also because they often lead to murder, destruction of property or other grave allied offences. Included under this category are smuggling and bank fraud.
Terrorism is a form of low intensity war, therefore, terrorism is also a political act. The objective of the terrorist is always not to overthrow the government of a country, but rather to change the political calculus of that country.
While considering the significance of lawlessness in impeding economic development and finding its solution, it is pertinent to point out that no development can take place without the protection of life, liberty and property. For providing this protection it is necessary to adhere to the rule of law. In this connection, an analysis of various theories of the economic impact of law and order will not be out of place.
A society, which experiences law and order situation is one which fails to meet the law and order condition. In brief, law and order situation and law and order condition, in the context of our discussion, represent mutually exclusive social structures and phenomena. Social, cultural, religious and political values and institutions that enshrine those values and make them operational in day to day business and dealings between the main agents of a particular society determine the conditions of law and order.
There is now a new emphasis on "non-material" needs that cannot be dispensed, but, in addition to being valued in their own right, may be the conditions for meeting "material" needs, like self-determination, self-reliance, political freedom and security, participation in making the decisions that affect workers and citizens, national and cultural identity, and a sense of purpose in life and work. This has been accompanied by attempts to evolve human and social indicators of development that would reflect the extent to which some of these needs are met.
When a society suffers from a law and order situation, the basic propensities to develop fundamental science, to apply science to economic ends or to accept innovations, are completely blunted, and the society is deprived of the important stimuli and catalysts of growth, which have greater effectiveness and impact in the long-term perspective.
The government being an indivisible entity, its developmental and administrative roles cannot be separated. Although opinions differ about the nature and extent of governmental intervention in economic affairs, it is now being widely recognised that without maintaining rule of law and creating conditions of peace, no developmental activity can take place in either the public or the private sector.
A natural outcome of the dual crisis of the economy and the deviation from the rule of law was the erosion of many of the institutions of the State through which effective governance is exercised.
The required remedies point to the necessity of a viable system of criminal justice administration commensurate with the dictates of economic development. However, there is room for serious research on the subject. Actually, this is the need of the hour, and modern economists should pay sufficient attention to it.
In the context of Bangladesh, this subject assumes pivotal importance because of the fact that the preservation of a smooth law and order condition is a prerequisite for achieving the goal of sustainable economic development.

Muhammad Nurul Huda is a columnist of The Daily Star.