The Scale and Impacts of Money Laundering

The Scale and Impacts of Money Laundering

Brigitte Unger

The book gives an interdisciplinary overview of the state-of-the-art of money laundering as well as describing the legal problems of defining and fighting money laundering. It then goes on to present a number of economic models designed to measure money laundering and applies these to measuring the size of laundering in The Netherlands and Australia. The book also gives an overview of techniques and potential effects of money laundering identified and measured so far in the literature. It adds to this debate by calculating the effects of laundering on crime and economic growth.

Chapter 6: Short Term Effects of Money Laundering

Brigitte Unger

Subjects: economics and finance, economic crime and corruption, money and banking, law - academic, corruption and economic crime


1 In Unger et al. (2006) we did a systematic literature research on ‘money laundering’ and on the Dutch word for it, ‘witwassen’, in order to find out which effects of money laundering have been identified so far. We searched the publications from the international organizations IMF, OECD and FATF. In addition, we browsed through Econlit, an economic search database that includes about 750 journals and over 44,000 working papers. The Econlit search produced 56 hits. We also searched the Dutch Central Catalogue, NCC. This database includes, in total, around 14 million books and 500,000 magazines. This search turned up another 55 hits. Furthermore, we browsed through the Journal of Money Laundering Control and the Journal of Financial Crime. The period covered by our searches was 1990–2004. For more details on these searches see Unger et al. (2006, chapter 4). Altogether, we found 25 different effects of money laundering mentioned in literature. Most of these studies are merely speculations about what might happen. Some of the publications refer to estimates without ever mentioning the source. One good example of this is the work of Bartlett (2002). He lists all sorts of effects of money laundering, using sentences such as ‘it is clear from available evidence’ that money laundering has such and such effects, without ever giving a hint of where this evidence should be found. Furthermore, as is the case with the papers on the amounts of money laundering, one source refers to the other – without much...

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