Economic Development and Transnational Organized Crime in West Africa

In the midst of widespread underdevelopment, a full spectrum of transnational organized crime (TOC) activities have flourished, especially since the 1990s. These include predatory crimes ranging from maritime piracy and kidnapping to cyber theft, as well as market-based illicit enterprises such as trafficking in drugs, weapons, humans, counterfeit pharmaceuticals, and natural resources. The relationship between low levels of development and TOCs in West Africa is explored in this study, focusing first on channels through which underdevelopment heightens the region's susceptibility to TOCs. Weak institutions and rule of law are identified as key factors, with low GDP per capita and a correspondingly small tax base limiting resources available to fund public institutions, including schools, courts, and law enforcement. Poorly trained and underpaid judges, public prosecutors, and police can make the entire criminal justice system less effective and more susceptible to corruption and capture by criminal interests. Heightened individual and household vulnerability is another channel through which underdevelopment contributes to the prevalence and spread of TOCs. High rates of household poverty and unemployment may expose some members to greater risk of involvement in or victimization by certain TOCs. For example, youth and especially young women from poor households are more likely to be victims of criminal groups profiting from coerced sexual labor, while poor and unemployed young men may be more susceptible to voluntary or coerced recruitment into predatory activities such as piracy. Transnational crimes such as cyber theft, bank fraud, and money laundering may require higher levels of training and skill, and their prevalence across West Africa is likely to be less directly related to individual or household poverty and more the result of weak regulatory capacity on the part of the state and low levels of respect for rule of law in the broader society. Recent research conducted by MSI with USAID on drug trafficking in transit countries found that those who already had jobs in the transportation or import/export fields were more likely to be involved in the drug trade, but found no evidence that poverty played a significant role in recruitment. The study also conducts a quantitative analysis of the economic impacts of two TOC activities in West Africa: maritime piracy and drug trafficking. The analysis uses directly observed event data from the International Maritime Bureau (IMB) and UNODC's data on individual cocaine seizures and seizures of all drugs as proxies for drug flows through and police action in the region. The two TOC activities were selected for their potential to affect country-level economic performance to a measurable degree, their urgency as a threat to economic and human development in the region, and the availability of sufficient data of reasonable quality in the public domain to support original quantitative analysis. The maritime piracy section uses a thirteen-country monthly panel with a twenty-four-month lag to capture the effects of pirate attacks and armed robbery against ships on trade, growth, and political and economic risk in the coastal countries of the Gulf of Guinea. The drug trafficking analysis employs an original sixteen-country quarterly panel with a one-period lag, to generate estimates of the costs and benefits associated with the size of seizures of cocaine, measured in kilograms, and the frequency of seizures of all drugs, specified as a count.