Illicit Trade and Smuggling

by

Paul Kemp, Rebecca Galemba

• LAST REVIEWED: 28 October 2020
• LAST MODIFIED: 28 October 2020
• DOI: 10.1093/obo/9780199743292-0295

Introduction

In this article, illicit trade and smuggling refer to the unauthorized sale, purchase, exchange, or transport of goods, persons, animals, or technology across borders. Illicit trade across borders may entail goods considered dangerous, those that circumvent prohibitions in one or both countries, or mundane items and population movements that evade controls or regulations. However, smuggled goods may be produced, consumed, or recirculated legally, informally, or illegally. Lacking a universal, global set of norms and regulations across time, much of what is considered to be illicit trade may be legal in one place while prohibited in another, or tolerated in one time and banned in another. The forms smuggling takes and its profitability are shaped by regulations, their inconsistent application, and their differences across different regulatory spheres. Illicit trade often dovetails with legal global trade; forms of integration from below may proceed alongside, compete with, resist, or even complement and foster legal global economic flows. Power relations, within countries and wielded by more powerful nations with influence to shape trade agreements, trade policies, financial norms, and global prohibition regimes, normalize the kinds of international trade considered legal and beneficial and foster the criminalization of competing alternatives. Yet, such norms are not necessarily widely shared or consistently applied and implemented. Individuals engaging in forms of illicit trade and smuggling may not share the perspective of states or international organizations regarding the morality and legitimacy of their actions. Scholars contend that perceptions of illicit trade risk perpetuating seeing like a state, making historical and comparative perspectives paramount. Not everything the state does is moral and not every aspect of illicit trade is amoral. This may pertain especially with respect to the marginalized; extra-legal trade may provide a mode of subsistence, and state regulations may be experienced as selective, predatory, and protective of elite privilege and prevailing arrangements of inequality. States have the power to determine what is legal or criminal in the first place. Yet critical perspectives also point to how states and elite actors may benefit not only from forms of corruption, but also from illicit trade more broadly such that illicit trade is constitutive of state power, bureaucratic expansion, and international norms. Debate persists regarding whether illicit markets stabilize, build, compete with, or destabilize governance arrangements. Scholars also disagree whether illicit trade has grown, facilitated by globalization, or whether perceptions of this rising threat are shaped more by questionable numbers, state/private interests, and changing prohibitions.

Contemporary Overviews

Arguably the best place to start is the introductory chapter in Beckert and Dewey 2017, which provides a rigorous conceptualization and categorization of illicit economies. Much of the literature over the past two decades has addressed the question of whether such economies have been expanding in relative or absolute terms. Debates around the threat posed by international illicit trade often reflect scholars’ different conceptualizations of globalization. For example, Naím 2005 points to vast changes since the 1990s in communications, technology, and economic reforms. The author views these changes as a boon to smugglers, while regulatory agencies and states have failed to keep up. Other scholars (e.g., R. T. Naylor, Peter Andreas) caution against alarmism in discussions of illicit globalization. Naylor 2004 points to today’s relations between illicit traders and the state as simply the latest stage in an age-old process, even as forms of social tolerance, forms of smuggling, regulatory norms, demand, and the nature and types of activities may have changed over time. Naylor argues that globalization is not necessarily a criminogenic factor per se. For Friman 2009, the very notion of “transnational organized crime” is problematic to the extent that it conflates a wide variety of criminal organizations, networks, and activities. From an anthropological perspective, van Schendel and Abraham 2005 draws attention to the role of states and statist language in producing “illicit and criminal things.” These authors, in addition to those of Thomas and Galemba 2013, highlight the social and political construction of illicit trade, pointing to how processes of illegalization work to garner political capital and cloak and reinforce preexisting forms of economic, national, racial, and gender inequality. Meagher 2014 traces how market reform agendas have influenced changing definitions of the illicit in Africa. Mathews, et al. 2012 takes up the politicization of illegality within the context of global inequality. The contributors point to the grounded everyday practices by which people engage in petty illicit activities such as smuggling, performing a kind of “grassroots development from below” in resistance to, yet also embedded within, formal structures of globalization that have marginalized and criminalized their livelihoods. Storti and De Grauwe 2012 applies the concepts of mainstream economics to explore the market incentives driving illicit trades. Nordstrom 2007 is an engaging narrative approach that delves into how the worlds of licit and illicit trade interweave at local, national, and global levels, demonstrating the blurred lines among legality, illegality, economics, and morality.

• Beckert, Jens, and Matías Dewey, eds. The Architecture of Illegal Markets: Towards an Economic Sociology of Illegality in the Economy. Oxford: Oxford University Press, 2017.

  Contains a lucid overview and taxonomy of illegal markets, explaining the differences among “illegal products,” “stolen goods,” “counterfeit goods,” “repugnant goods,” and “rule violations.” The authors distinguish further between illegality and related concepts such as informality and illegitimacy, while situating the “illegal markets” research program in relation to more established literatures on “organized crime” and “the informal economy.”

• Friman, H. Richard, ed. Crime and the Global Political Economy. Boulder, CO: Lynne Rienner, 2009.

  A useful collection of essays on the relationships between transnational criminal groups and other “actors” in the international system. The latter includes everything from strong states responsible for internationalizing prohibition norms to “tax haven” countries where criminal businesses legitimize their wealth. The book also includes specific chapters on human trafficking and the role of immigrant communities in illicit economies.

• Mathews, Gordon, Gustavo Lins Ribeiro, and Carlos Alba Vega, eds. Globalization from Below: The World’s Other Economy. London: Routledge, 2012.

  A bottom-up examination of the contemporary underground/informal economies in both copy/counterfeit goods and used goods. The authors suggest that these economies constitute a counter-hegemonic world system, contrasting and co-existing with the world of legal international trade.

• Meagher, Kate. “Smuggling Ideologies: From Criminalization to Hybrid Governance in African Clandestine Economies.” African Affairs 113.453 (2014): 497–517.

  Meagher traces several decades’ worth of shifting intellectual fashions with respect to smuggling (and its relation to economic development) in Africa. She concludes that “market reform agendas play a greater role than empirical processes on the ground in shaping the way we think about clandestine economies” (p. 515).

• Naím, Moisés. Illicit: How Smugglers, Traffickers and Copycats Are Hijacking the Global Economy. New York: Anchor, 2005.

  Perhaps the most widely read statement of the thesis that governments are “losing the war” against illicit economies unleashed by the forces of globalization. The book provides a useful and fairly comprehensive survey of the various illicit trades today—from drugs and weapons to intellectual property and human kidneys.

• Naylor, Robin Thomas. Wages of Crime: Black Markets, Illegal Finance, and the Underworld Economy. Ithaca, NY: Cornell University Press, 2004.

  Challenges the commonplace notion that globalization has led to an intensification of illicit trade worldwide. Naylor contextualizes the available data to point out that while the absolute volume of illicit trade has increased, the percentage of the illicit (as a proportion of all international trade) has remained relatively consistent over time.

• Nordstrom, Carolyn. Global Outlaws: Crime, Money, and Power in the Contemporary World. Berkeley: University of California Press, 2007.

  Takes readers from postwar Angola to the world of oil contracts, customs fudging, international shipping, and money laundering to demonstrate how legality and illegality intertwine in the global economy. Nordstrom presents her firsthand ethnographic research from various illicit trades and multiple continents within a broader discussion of international politics, economics, and ethics. Recommended as an introduction to the topic that is also accessible to general audiences.

• Storti, Cláudia Costa, and Paul De Grauwe, eds. Illicit Trade and the Global Economy. Cambridge, MA: MIT Press, 2012.

  A look by economists at the illicit global economy. Themes explored include the “risk premium” associated with criminalized trades, the (in)elasticity of demand for addictive drugs, the structure of competition in globalized illicit markets, etc.

• Thomas, Kedron, and Rebecca B. Galemba. “Illegal Anthropology: An Introduction.” PoLAR: Political and Legal Anthropology Review 36.2 (2013): 211–214.

  An introduction to a symposium focusing on the question of how and why certain practices are illegalized, including anthropology’s role in “regimes of illegalization.”

• van Schendel, Willem, and Itty Abraham, eds. Illicit Flows and Criminal Things: States, Borders, and the Other Side of Globalization. Bloomington: Indiana University Press, 2005.

  Explores the power dynamics that shape the definitions of legality over time and place, distinguishing between legality as a political designation and licitness as a social definition of acceptability. The contributors suggest areas where illegality and licitness clash, particularly in border zones and underworlds, where states’ views of particular people, places, and activities may not be shared by those who experience regulations as impractical, obstructive, or even criminalizing and unethical.