A budding science of illegal markets

Area of Science:

• Criminology
• Economics
• Sociology

Background:

• Illegal markets cause significant societal and environmental damage.
• Scholarly attention to illegal markets as a distinct class of objects is surprisingly limited.

Purpose of the Study:

• To explore illegal markets as a class of objects.
• To identify similarities and differences across various illegal markets.
• To categorize common illegal markets based on their function and impact.

Main Methods:

• Comparative analysis of nine distinct illegal markets: human smuggling, commercial sex, firearms, money laundering, illegal fishing, wildlife trafficking, counterfeit goods, drugs, and tobacco.
• Examination of market variations based on the nature of goods/services and policy pressures.
• Analysis of market adaptability and technological adoption.

Main Results:

• Markets exhibit significant variation due to the "physics" of their goods/services and adaptations to policy.
• While true innovation rates are low, markets readily adopt external innovations (e.g., cryptocurrency, dark web).
• Markets are dominated by smaller organizations, leading to low R&D investment but high adaptability.

Conclusions:

• Illegal markets can be broadly categorized into four groups: resource theft, facilitating crime, undermining authority, and supplying harmful products.
• Understanding these categories and market dynamics is crucial for addressing their harmful impacts.
• The adaptability of illegal markets to new technologies presents ongoing challenges for enforcement.