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.

Stay focused

From the feeds of universities, think tanks, and the media.
01.07.2026
U.S. Declines to Renew USMCA Trade Deal, Starting 10-Year Clock to Expiration
Business

U.S. Declines to Renew USMCA Trade Deal, Starting 10-Year Clock to Expiration

The Trump administration said Wednesday it would not immediately request to renew the North American trade agreement, leaving businesses uncertain about the trade deal’s direction.

New York Times Business

Geldpolitik: Preisdruck im Euro-Raum lässt im Juni deutlich nach
Business

Geldpolitik: Preisdruck im Euro-Raum lässt im Juni deutlich nach

Die Teuerungsrate fällt deutlich und liegt wieder unterhalb der Marke von drei Prozent. Wie reagiert die EZB auf den nachlassenden Preisdruck?

Handelsblatt

Europe watches the next American revolution take shape
Politics

Europe watches the next American revolution take shape

Europe watches the next American revolution take shape Expert comment jon.wallace 1 July 2026 Europe cannot affect the course of America’s latest reinvention, as it did 250 years ago. But it can adapt to a more unhappy relationship. London is a fraught place from which to watch an American revolution. There is an amusing local story, that King George III spent many hours poring over military plans in a basement near Buckingham Palace, scheming how best to supress troublesome revolutionaries. That basement, the rumour goes, was located in what is now Chatham House: my new professional home after leaving Washington and life as a US diplomat last year.  Throughout America’s War of Independence, Great Britain’s leaders dumped blood and treasure into securing their rebellious colonies, intent on overcoming their scrappy but capable countrymen: revolutionaries who sought religious liberty and freedom to dissent. Revolutionaries who opposed unjust taxation and exploitative trade relations. Revolutionaries who rejected the status quo.  King George’s basement plotting was for naught, and a new nation was born. Today, 250 years later, leaders in Britain – and across Europe – once again watch with trepidation as new political currents take root across the Atlantic. History doesn’t repeat itself, but in the US its echoes carry a similar spirit of revolt. This movement is not directed at an outside power, but rather at the current system’s ability to address Americans’ biggest worries: the availability and affordability of healthcare above all, followed by issues including the economy, inflation, federal spending and the deficit, and income and wealth distribution.   While many Americans agree on the diagnosis, there’s sharp division on the remedies. Some call for reining in expansive US military commitments abroad and redirecting war spending to focus on investments at home. Others hope to dismantle the billionaire class and promote greater economic justice. Some seek a consolidation of executive power to unleash the authority of the presidency. These are live debates heading into the November midterms, and they cut across party lines.Europe’s viewEuropean leaders, observing this storm, wonder what will remain when the tempest subsides. They recognize these winds blowing across the US for what they are: not a short-lived gust but a sustained gale. They know that irrespective of who next presides over the Congress or sits behind the White House’s Resolute Desk, the US is fundamentally altering its role in the world. Plans must be made to account for a more inwardly focused US, one that is less embedded in alliances and less aligned on values.  This is not a new American story. As the ink dried on the Declaration of Independence, the new United States began an awesome project of stitching together a vision for its role in the world – no small feat given the composition of its often-divided citizenry.   The US still needs Europe when it comes to global financial markets, emerging technology cooperation, intelligence sharing, select military cooperation and alignment on China.   President George Washington warned against alliances and entanglements, worried that permanent structures would weigh the new nation down with others’ burdens. His successors largely stayed the course. It took Pearl Harbor to drag a reluctant President Roosevelt into war in Europe. The post-Second World War structure was a new, American-crafted design, launching the most powerful set of interlocking alliances the world had ever seen. US troops ensured the security of partners on bases across six continents, paid for with ballooning federal deficits. Liberalized trade brought cheap goods but closed factories in the US. New immigrants made America an engine of innovation but fuelled a nativist backlash. President Trump did not spark such fears, but he stoked them.As Americans begin the process to select Trump’s successor, competing visions for the US’s future will emerge. Candidates will debate the true nature of the threat from China, how much time to spend on Russia, the contours of a fairer trade regime, the rules of the road for emerging technology, and the future of alliances. Whoever wins, Europe is right to anticipate a different relationship with the US. Today’s era, of a Washington that prioritizes American manufacturing and higher trade barriers, is here to stay. A period of greater burden-sharing with partners and a more limited global US defence role will outlast Trump. So too will the president’s transactionalism, and narrower conceptions of national interest.For those of us who still believe in the value of alliances, it’s not all doom and gloom. These alliances will endure in newer forms. The scope will be narrower, but the US still needs Europe when it comes to global financial markets, emerging technology cooperation, intelligence sharing, select military cooperation, and alignment on China.   The World Today Related work Laurel Rapp: ‘There’s no going back to the America of the past decade’ Europe needs the US too – maybe a bit too much, as its leaders have painfully learned. But Europe is now making key investments in NATO spending, an independent defence industrial base delinked from US defence trade, greater sovereign AI capabilities, and space and satellite infrastructure. Fear of US dependency has accelerated these investments, but in the long run, they can be converted into sources of transatlantic strength.I recently hosted a former US official in conversation with diplomats in London. Like me, this person was pessimistic about the prospects for a restoration of trust with Europe post-Trump. But, the visitor observed, many loveless marriages survive because one spouse keeps cutting the grass and the other keeps cooking dinner. ‘What are these tasks?’ another wondered: that is, what bonds might keep the US–Europe marriage intact?In my view, it goes something like this: the US provides Europe with a nuclear umbrella, integration in US capital markets and preferential access to American technology. Europe grants the US access to its capital, offers secure supply chains for key technology inputs and extends the reach of its sanctions.As Europe takes on fuller ownership of its own neighbourhood, especially across its eastern flank, the US will be freed up to look east. The shared language of democracy and universal values are no longer centred. But the US and Europe remain bound together, joyless yet committed.  The multitudeKing George III marched over to Parliament in October 1775 to detail his war plans against the ‘unhappy and deluded Multitude’ in America. He promised to ‘receive the Misled with Tenderness and Mercy’ once they realized the error of their ways.The revolutionaries may have been unhappy as British cannons tore into their defences, but they were certainly not deluded. The multitude went on to build a nation that has reshaped history, underwriting an era of security and prosperity for many, though not all.  

Chatham House

30.06.2026
29.06.2026
What Can the Arts Teach Future Leaders?
Society

What Can the Arts Teach Future Leaders?

What can a Van Gogh painting, a Puccini opera, and a midnight jazz session teach future business leaders?That question lies at the heart of Leadership and the Arts in Paris, an MBA intensive course led by Professor Daniel Newark. Over three immersive days, students explored leadership through paintings, literature, music, dance, and opera while visiting some of Paris's most iconic cultural institutions, including the Palais Garnier, the Musée d'Orsay, and the Opéra Bastille. "The course stems from the conviction that there is substantial overlap between foundational topics of leadership and foundational topics addressed by the arts and humanities," said Newark. "In both cases, subjects like making and justifying decisions, motivating action, attention, meaning and storytelling, emotion, ambiguity, tension, and paradox are central."Rather than offering leadership formulas or management hacks, the course invites students to engage with complexity through some of humanity's greatest artistic works. Along the way, they are encouraged to develop skills that are increasingly valuable for leaders: observation, interpretation, empathy, and reflection.For Kasia Krzowska (MBA ’27), one of the course's most important lessons was learning to slow down and notice."The professor constantly pushed us to observe before rushing to interpret," she said. "It sounds simple, but it goes against how most professional environments operate, since speed is rewarded and slowing down is often perceived as hesitation."At the Musée d'Orsay, students were asked to analyze a work of art through the lens of leadership. Krzowska chose Gustave Caillebotte's Raboteurs de parquet and came away with a new perspective."It made me think about leadership differently, not as authority, but as attention," she said. "Who do you choose to see? Whose work do you make visible? These are questions I think every leader should ask themselves."The course also challenged students to embrace ambiguity. Electronic devices were prohibited during class sessions, creating space for deeper observation and discussion.One of the most memorable moments for Federick Nasol (MBA Class of ’27) came after a performance of Tosca, when students debated the opera's portrayal of power and authority."The men in the group tended to analyze the imbalance structurally like the mechanics of power, the logic of Scarpia's position," he recalled. "The women felt it differently. For them, Tosca's bind wasn't abstract."The discussion highlighted how personal experiences shape the way leaders interpret situations. Leadership is not necessarily about finding a single correct interpretation, Nasol said, but about recognizing that people can experience the same reality in very different ways.For Newark, these conversations are precisely the point."Much of leadership is interpreting and making meaning out of ambiguous stimuli and circumstances," he said. "The more one can perceive about one's environment and the people one is leading, the more effective a leader one is likely to be."The city of Paris itself serves as an extension of the classroom. Whether discussing Van Gogh at the Musée d'Orsay, attending a performance at the Palais Garnier, or reflecting on leadership questions between cultural experiences, students are immersed in an environment that encourages curiosity and dialogue.Reflecting on the experience, Nasol believes the course is particularly relevant at a time when technology is transforming the way people learn and work."It reminds us that leadership is still about people... that we are gloriously, stubbornly, inconveniently human," he saidThe arts became more than a source of inspiration. They offered a new way to think about leadership—one rooted not in easy answers, but in observation, reflection, and a deeper understanding of the human experience.

HEC

Warum die VW-Krise nicht nur aus China kommt
Business

Warum die VW-Krise nicht nur aus China kommt

Präsentiert von Ørsted.

Politico