Economies of Crime

The latest issue of the university magazine HSG FOCUS focuses on the complex intersections between economics, law, and crime – from global drug markets and everyday counterfeiting to accounting fraud and organised crime in Switzerland. The articles show how illegal practices depend on legal structures – and where politics, regulation, and society need to take action.
"Facts and figures on the global shadow economy": Daniel Sager's video provides an overview of the extent and geographical aspects of the most important illegal markets worldwide.
"Chemistry and technology fuel the drug trade": Matías Dewey and Alvaro Pastor highlight how closely the illegal drug trade is intertwined with legal markets. Chemicals from global industry, varying government regulations, and digital technologies enable flexible value chains that are difficult to control. From coca cultivation in the Peruvian Amazon to encrypted messengers and digital payment systems, the article shows that illegal economies cannot function without legal infrastructures – and why regulation, platform control, and government enforcement need to be rethought.
"Homo economicus in crime": Nora Markwalder asks whether criminals act rationally. She explains rational theories of crime, according to which perpetrators weigh up costs and benefits and make targeted use of opportunities – an approach that enables prevention. At the same time, she points out the limitations of this view: many crimes are committed without rational calculation and are more strongly influenced by social or psychological factors.
In his article "The Gucci bag and the big business of counterfeit goods", Markus Müller-Chen sheds light on the billion-pound trade in counterfeit products. High original prices, status consciousness, online availability, and deceptively genuine "super fakes" drive demand.
The article highlights legal remedies, but also the risks for companies, jobs, and buyers, who may be liable to prosecution. Under the title "Accounting scandals: it often ends badly when you embellish the figures", Peter Leibfried analyses the similarities behind cases such as Wirecard, Enron, and Signa.
It shows that despite regulation, patterns repeat themselves: overvalued assets, hidden debts, false consolidation. It often starts with pressure and grey areas, not with intent. Leibfried advocates for better education, ethical awareness, and a critical approach to financial data.
"The Mafia is everywhere. Even in allotment gardens": Henry Habegger shows how organised crime benefits from liberal structures in Switzerland. Lenient penalties, federalism, and enforcement deficits create loopholes. Initial reforms point to a rethink – but consistent enforcement remains crucial.

Article

Roohi Mariam Peter: Paper mills are a network – scientific fraud growing rapidly (2025)

In her article, Roohi Mariam Peter explains how commercial "paper mills" are driving a fast‑growing wave of scientific fraud by selling fabricated research papers to paying authors, undermining journals and peer review.

Book

Elena Denisova-Schmidt / Philip G. Altbach / Hans de Wit: Handbook on Corruption in Higher Education (2025)

This Handbook provides an overview of corruption within the context of higher education. Through a variety of international case studies, theoretical frameworks and methodologies, it examines the underlying issues involved in corruption as well as the damaging impact on scholarly cultures and the academic enterprise.

Study

Maritza Paredes / Alvaro Pastor: Illicit crops in the frontier margins: Amazonian indigenous livelihoods and the expansion of coca in Peru (2023)

The expansion of coca-cocaine markets in the Amazon is not solely attributable to state failure or criminal groups. This paper demonstrates how long-term development projects in the Amazon frequently result in the opening of agricultural frontiers, the attraction of settlers, and the transformation of the ecology. The unintended consequences of these state-development projects are the progressive impoverishment of local agricultural communities, the degradation of soil quality, and the deterioration of land security tenure. In this scenario, coca crops emerge as the most viable option for ensuring livelihoods.

Study

Matías Dewey / Andrés Buzzetti: Easier, Faster and Safer: The Social Organization of Drug Dealing through Encrypted Messaging Apps (2024)

Digitalization is not limited to the legal economy. It also permeates illegal markets, improving the way people exchange goods and services while making detection much more difficult. For example, this research shows that perfectly legal apps are used to sell drugs. The experience of drug sellers and users is quite clear: apps like Telegram make drug market activity easier, faster, and safer. This article was the first to bring this phenomenon to light.

Website

Stop Piracy

The Swiss platform Stop Piracy provides reliable, fact-based information on counterfeiting and piracy, thereby making an important contribution to raising public awareness. The compact fact sheets are particularly helpful, as they clearly show how to recognise counterfeits and dubious online providers. Anyone who wants to deal with the topic not only theoretically but also practically will find an excellent point of contact here.

Book

Jens Beckert / Matías Dewey: The Architecture of Illegal Markets. Towards an Economic Sociology of Illegality in the Economy (2017)

If you want to understand how illegal markets work — and not just assume that they are merely the consequence of criminal organizations or failed states — this book offers a fresh perspective on hard-to-research economies. It pays attention to additional elements that constitute economies beyond the law, such as credit, infrastructure, social acceptance, and the meaning of commodities. It is the first serious attempt to conceptualize, classify, and suggest future research directions on illegal markets from a sociological perspective.

Film

Martin Scorsese: The Wolf of Wall Street (2013)

If you want to know how opportunities encourage crime, we recommend the film The Wolf of Wall Street. The film is based on the story of stockbroker Jordan Belfort and is set in New York in the 1980s and 1990s. The scene of the crime is the barely regulated market for so-called penny stocks. The film shows how easy it was to manipulate the market and defraud unsuspecting customers at the time and how low the chance of getting caught was – especially when you lock the financial regulators away in ice-cold offices...

Study

OECD: Counterfeiting, Piracy and the Swiss Economy 2025

For an additional economic perspective: the OECD study highlights the economic consequences of counterfeiting and piracy in Switzerland. It shows how severely export-oriented industries such as the watch and pharmaceutical industries are affected and provides up-to-date data on trade routes, damage costs and global contexts.

Book

Christof Schürmann: Die Bilanztrickser – wie Unternehmen ihre Zahlen frisieren und den Anleger täuschen (2003)

As a journalist at the German business magazine WirtschafsWoche, Christof Schürmann has been critically monitoring corporate reporting for many years. He not only looks at general business and financial developments but also addresses related issues of accounting and financial reporting. He shows where there is room for manoeuvre and provides examples of how this can be exploited.

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Yesterday
A year on: Four ways Trump's tariffs have changed the global economy
Business

A year on: Four ways Trump's tariffs have changed the global economy

US tariffs stand at the highest rate in decades. But what has the impact been?

bbc

Evaluating the ethics of autonomous systems
Education

Evaluating the ethics of autonomous systems

MIT researchers developed a testing framework that pinpoints situations where AI decision-support systems are not treating people and communities fairly.

MIT

Beyond oil: The macroeconomic impact of commodity supply disturbances
Business

Beyond oil: The macroeconomic impact of commodity supply disturbances

As geopolitical tensions from Ukraine to the Middle East disrupt global supply chains, understanding how diverse commodity shocks affect the broader economy has become increasingly important. This column argues that although oil has dominated policy discussions, recent events show that other commodities also play a critical role in shaping macroeconomic outcomes. The authors find the stagflationary impact of commodity supply disturbances originating outside the oil market to be at least as important for both output and inflation.

Center for Economic Policy Research

Information equalisation and competition in selection markets: Evidence from auto insurance
Business

Information equalisation and competition in selection markets: Evidence from auto insurance

Efforts to reduce information asymmetries across firms are increasingly at the centre of Europe’s digital regulatory agenda. This column examines how differences in risk-rating precision, cost structures, and product differentiation among Italian auto insurers affect pricing and targeting strategies. It estimates large consumer surplus gains from greater information sharing, driven by reductions in premiums. The gains are concentrated among less informed firms, while losses are largest for those at the top of the information hierarchy. Policy interventions such as the creation of a centralised risk bureau can generate substantial welfare gains but need to preserve incentives for innovation.

Center for Economic Policy Research

01.04.2026
‘Truth is rarely found in echo chambers’
Education

‘Truth is rarely found in echo chambers’

Faculty, staff, and students explore what it takes to connect across difference at Community and Campus Life forum

Harvard University

Iraqi civilians are paying the price of the Iran war
Politics

Iraqi civilians are paying the price of the Iran war

Iraqi civilians are paying the price of the Iran war Expert comment thilton.drupal 1 April 2026 The US-Israeli war on Iran has disrupted oil exports, pushed up prices and deepened fears of electricity shortages. Iraq has been increasingly dragged into the US and Israel’s war with Iran, with both sides attacking each other on its territory. Civilians have suffered as rockets and drones fall near residential buildings in cities including Baghdad and Erbil. The war has also exposed the fragility of Iraq’s economy and society. Most Iraqis are facing this latest conflict with limited financial resources and minimal savings, and with low confidence in the state to protect them from the war’s impact.For many households, the war has caused anxiety over whether they will keep receiving their salaries or be able to access food and medicine. There are also concerns over whether electricity supplies will continue as temperatures rise ahead of summer. Suspected Iranian attacks on two tankers in Iraqi waters near the port town of Al Fao in early March have also highlighted Iraq’s heavy dependence on maritime trade. The disruption to Gulf shipping is already constraining imports and leaving Iraq-bound cargo stranded or delayed. For a country that moves more than 90 per cent of its trade by sea, prolonged disruption in the Gulf risks hitting Iraq’s economy and depriving it of crucial oil exports that finance the majority of the state’s budget. Iraq’s safety net underminedIraq is confronting the war with weaker governance structures and less capacity to shield society from the fallout than many of its neighbours.The Iraqi state budget is the main safety net for much of the population. It provides salaries to millions of Iraqis, and many households still rely on state spending for their day-to-day survival, whether through salaries, pensions or welfare linked to public expenditure.  Related work Iraq’s water crisis: Dammed by neighbours, failed by leaders Iraq’s economy is still heavily dependent on oil, with crude sales making up more than 90 per cent of the state’s income. When oil flows are disrupted, state spending is affected. In turn, this hits household budgets through increased rent, food, transport, medicine and education costs. The war on Iran has exposed this reliance by directly damaging Iraq’s export capacity. Baghdad declared force majeure on foreign-operated oilfields after disruption in the Strait of Hormuz halted most crude exports. Iraq still has about $97 billion in reserves, but much of that is not immediately liquid, and reserves can only provide short-term relief. Economists have estimated that Iraq has around two months before salaries are directly impacted, after which the government will have to resort to temporary fixes to keep salaries paid.Across Iraq, basic food prices have risen by 15 to 25 per cent. In the Kurdistan Region, officials report that the price of vegetables usually imported from Iran has doubled, while fuel prices have reportedly risen by more than 20 per cent in some cities. Meanwhile, the dinar has weakened on the black market from the official rate of 1,300 to about 1,550 to the dollar, adding further pressure on household purchasing power. Looming electricity shortagesElectricity is likely to be the most serious way in which the war will be felt inside Iraqi homes. Despite Iraq having large natural gas reserves, it flares most of this gas as it lacks the infrastructure to use it as fuel for electricity. Since 2017 Iraq has instead relied on imported Iranian natural gas to provide electricity. More than 30 per cent of Iraq’s current electricity generation depends on those imports, leaving it exposed to regional tensions. Israel’s 18 March attack on Iran’s South Pars gas field disrupted a significant portion of Iraq’s gas imports. Gas supplies to Iraq have now resumed, but only partially, stabilizing the grid but leaving little margin for further disruption.  Related work Iran war: regional shock or global crisis? Independent Thinking podcast The electricity system remains fragile heading into the summer, when demand rises sharply due to the heat. With total generation capacity at only around 24-28 gigawatts and projected peak demand in 2026 at 57 gigawatts, any further disruption could quickly deepen shortages. That vulnerability was already visible on 4 March, when Iraq suffered a nationwide blackout after a sudden drop in gas supplies to the Rumaila gas-fired power plant in Basra.Iraq has previously explored alternatives to Iranian imported gas, including importing gas from Qatar and Oman and efforts to expand domestic gas production. But these are not immediate substitutes. In Iraq, electricity shortages have historically sparked protests, with many citizens believing that years of higher oil revenues should have led to improvements to the country’s electricity infrastructure. The current conflict exposes how little has been done to make the system more reliable, despite repeated warnings. Political fallout?Pressures from the war risk inflaming a set of pre-existing and politically charged grievances. In Iraq, state legitimacy has already been weakened by years of corruption, policy short-termism and uneven provision. As the economic impact of the war ramps up, the public perception that the government cannot be relied on in a crisis matters almost as much as the immediate material impact. Protests over jobs and services were already re-emerging before the war. Earlier waves of protest targeted the ruling elite over corruption and the failure to provide services. Historically, many protesters have also rejected Iranian influence as well as the wider pattern of foreign interference in Iraq enabled by the post-2003 political system. 

Chatham House

Syrian President al-Sharaa on Iran war: ‘Syria will remain outside this conflict’
Politics

Syrian President al-Sharaa on Iran war: ‘Syria will remain outside this conflict’

Syrian President al-Sharaa on Iran war: ‘Syria will remain outside this conflict’ News release jon.wallace 1 April 2026 In his first UK public event, President Ahmed al-Sharaa urged negotiations to resolve the US-Israeli war on Iran – and discussed elections, reconstruction and foreign policy. Syrian President Ahmed al-Sharaa visited Chatham House on 31 March for a conversation with Director and Chief Executive Bronwen Maddox – his first public event in the United Kingdom. The two discussed Syria’s reconstruction, its foreign policy, and its position on the Iran war, before the president took questions from the audience.Asked by Maddox about his government’s position on Iran and the war with the US and Israel, President al-Sharaa said that:‘There is no doubt that Iran… was at the forefront of the conflict led by the [former] regime against the Syrian people. However, after we reached Damascus, we did not have an issue with Iran in Tehran; rather, our problem was with Iran in Damascus, because it was occupying Syrian villages and towns, displacing people, and so on.’   ‘We have held back from opening relations with Iran up to this point. Certainly, the war currently under way is negatively affecting the region by disrupting energy and fuel supplies, which in turn affects the global economy… What we had been advising was that they should look for a negotiated solution, rather than resorting to military force, because that carries major risks.’ Asked by Maddox if Syria would remain neutral in the war, he replied:‘Certainly, unless Syria is subjected to direct attacks by any party, it will remain outside this conflict. 14 years of war are enough for Syria, during which we have paid a very heavy price, and we are not prepared to go through a new experience. Those who have gone through the hardship of war know the value of peace…’ Asked if his government was helping to prevent weapons being transported to Hezbollah in Lebanon, President al-Sharaa said: ‘We, too, have paid the price for Hezbollah’s intervention in Syria over the past 14 years. Hezbollah was also an active partner with the [former] regime in the killing of the Syrian people.‘Nevertheless, after we reached Damascus, we tried to adopt policies that would not harm the situation in Lebanon. We were keen that the conflict should not extend into Lebanon, while at a minimum protecting our borders. Protecting the borders requires that those responsible for securing them prevent the entry of weapons and cases of smuggling.’ Addressing relations with Israel, he said: — Portrait of President al-Sharaa taken at Chatham House by Ander McIntyre  ‘We tried through dialogue and discussion. Indirect negotiations began and then moved to direct negotiations. We reached good points, but at the last moments we always find a shift in the Israeli position.’Maddox also pressed al-Sharaa on his 2025 promise to hold elections within five years: ‘Are you still on track for that?’ she asked.‘Certainly, Syria has taken initial steps. We held a national dialogue conference that produced recommendations. After that, we issued a constitutional declaration which stipulated that the first term would be five years as a temporary measure.‘During this period, we also conducted elections for the People’s Assembly, whose first session will begin next month.‘Of course, after five years, there will be further steps, as we have reviewed the laws and laid the groundwork for holding free elections in Syria.’  Here is a video clip of President al-Sharaa discussing the US-Israel war on Iran. You can watch the event in full here.  

Chatham House

Russland und Iran - Sicherheitsexperte: Trump verhält sich dumm
Politics

Russland und Iran - Sicherheitsexperte: Trump verhält sich dumm

Russland hilft Iran militärisch und geheimdienstlich - auch bei Angriffen auf amerikanische Ziele in der Golfregion. Die USA bestrafen dies nicht, denn "Trump hält Putin für seinen Freund", sagt Sicherheitsexperte Nico Lange.Götzke, Manfred

Deutschlandfunk