Electronic copy available at: http://ssrn.

com/abstract=1121129


The Iaradox oI Execled Iunishmenl The Iaradox oI Execled Iunishmenl The Iaradox oI Execled Iunishmenl The Iaradox oI Execled Iunishmenl Le,al and Le,al and Le,al and Le,al and
Economic Faclors Delerminin, Success and Economic Faclors Delerminin, Success and Economic Faclors Delerminin, Success and Economic Faclors Delerminin, Success and
Failure in lhe Fi,hl Failure in lhe Fi,hl Failure in lhe Fi,hl Failure in lhe Fi,hl a,ainsl a,ainsl a,ainsl a,ainsl Or,anized Crime Or,anized Crime Or,anized Crime Or,anized Crime
EDGARDO BUSCAGLIA
1

Director, International Law and Economic Development Center; ITAM School of
Law (Mxico); Columbia University (USA)
1be tegat ava ecovovic avat,.i. pre.evtea bere evpiricatt, te.t. tbe tbeoreticat fraveror/ aaravcea b,
v.cagtia ;1) ava b, Kvgter, 1eraier, ava Zevov ;200). 1bi. paper goe. be,ova tbe prior titeratvre b,
focv.ivg ov tbe evpiricat a..e..vevt of tbe actvat ivptevevtatiov of tbe iv.titvtiovat aeterrevce ava
prerevtiov vecbavi.v. covtaivea iv tbe |vitea ^atiov.` Covrevtiov agaiv.t 1rav.vatiovat Orgaviea
Crive ;Patervo Covrevtiov). . .avpte of 10 covvtrie. tbat bare atreaa, .igvea ava,or ratifiea tbe
Covrevtiov ra. .etectea. 1be paper rerifie. tbat tbe vo.t effectire ivptevevtea vea.vre. agaiv.t orgaviea
crive are vaivt, fovvaea ov fovr pittar.: ;i) tbe ivtroavctiov of vore effectire ;vaiciat aeci.iovva/ivg
covtrot .,.tev. cav.ivg reavctiov. iv tbe freqvevcie. of abv.e. of proceavrat ava .vb.tavtire ai.cretiov; ;ii)
bigber freqvevcie. of .vcce..fvt ;vaiciat covrictiov. ba.ea ov eriaevtiar, vateriat proriaea b, fivavciat
ivtettigevce .,.tev. aivea at tbe .,.tevatic cirit,crivivat forfeitvre. ava covfi.catiov. of a..et. iv tbe bava.
of crivivat grovp. ava,or vvaer tbe covtrot of ticit bv.ive..e. tiv/ea to orgaviea crive; ;iii) tbe attac/
agaiv.t bigb teret pvbtic .ector corrvptiov tiv/ea to orgaviea crive ;tbat i. aivea at captvrivg ava

1
Director, International Law and Lconomic Deelopment Center, Uniersity o Virginia,
School o Law ,1999-2005,, Adiser with the United Nations, Visiting Proessor o Law and
Lconomics, I1AM School o Law ,Mxico,, and Senior Law and Lconomics Scholar, Columbia
Uniersity ,USA,. 1his paper proides empirical results based on iv .itv judicial system and
intelligence system ealuations o 10 national legal jurisdictions ,conducted between 1993 and 200,
as part o an international academic ield project directed by the author. 1he legal research assistance
o 235 ocal teams o lawyers and economists within 10 countries is greatly acknowledged. 1his
work has also beneited rom comments made by colleagues at seminars and conerences on law and
economics o deelopment at the Uniersity o South Carolina School o Law-Barnes Symposium
,US,, the I1AM School o Law and Attorney General`s Oice ,PGR, in Mxico, Oxord Uniersity,
St. Anthony`s College ,UK,, United Nations Seminar on Counteracting 1errorism and Organized
Crime ,UNI1AR, Madrid-Spain,, \ale Uniersity ,US, , the Latin American Law and Lconomics
Association ,ALACDL, 2008 Annual Meeting in Mxico and rom the aluable comments proided
by three anonymous reerees.
Electronic copy available at: http://ssrn.com/abstract=1121129


fevaatiivg tbe tate.) ava ;ir) tbe operatiovat pre.evce of gorervvevt ava,or vovgorervvevtat prerevtire
prograv. ;fvvaea b, tbe prirate .ector ava,or gorervvevt. ava,or ivtervatiovat orgaviatiov.) aaare..ivg
tecbvicat a..i.tavce to tbe prirate .ector, eavcatiovat opportvvitie., ;ob traivivg prograv. ava,or
rebabititatiov ;beattb ava,or bebariorat) of ,ovtb tiv/ea to orgaviea crive iv bigbri./ area. ;ritb bigb
crive, bigb vvevpto,vevt, ava bigb porert,).

.v evpiricat ;vrivetric. voaet i. for tbe fir.t tive aeretopea for tbe abore fovr avticrive potic, aovaiv.
iv oraer to a..e.. tbe tegat ivptevevtatiov of orgaviea crive tar.. v tbi. covtet, tbe evpiricat re.vtt.
.vgge.t tbat bigbivpact pro.ecvtiov. ava effectire covrictiov. agaiv.t crivivat orgaviatiov. are te.. arirev
b, ivcarceratiov of pb,.icat per.ov. ava vore focv.ea ov ai.rvptivg tbe proavctiov fvvctiov of crivivat
grovp. tbrovgb a..et forfeitvre. tbat reavce tbe avovvt. of vet rortb aivea at epavaivg pvbtic corrvptiov
rivg. iv oraer to fevaatie tate.. .t tbe .ave tive, prerevtire poticie. aivea at aivivi.bivg tbe ftor of
,ovtb ivto crivivat actiritie. ritt at.o teva to ai.rvpt tbe .treetba.ea operatiovat capacitie. of orgaviea
crive.

.ccoraivgt,, a paraao of crivivat ai..va.iov everge. tbat reqvire. tbe aa;v.tvevt of ec/er`. ;1)
fraveror/ rbev apptiea to orgaviea crive. .. a re.vtt of tbe ;vrivetric.ba.ea avat,.i. pre.evtea iv tbi.
.tva,, ;v.t ret,ivg ov traaitiovat tegat .avctiov. to covvteract orgaviea crive ;e.g., ivcrea.ea ivcarceratiov
ava,or etraaitiov of pb,.icat per.ov.) ritt teva to create av ivcevtire for crivivat grovp. to epava tbeir
corrvptiov rivg. ava riotevt act. ;iv oraer to protect tbev.etre. frov bigber epectea .avctiov.) tbv.
ivcrea.ivg tbe fevaatiatiov of tbe .tate b, crivivat grovp. rbite evbavcivg tbeir operatiovat capacitie.. 1bi.
vvravtea re.vtt of appt,ivg traaitiovat crivivat .avctiov. ritt occvr if tbe vetror/ of crivivat a..et. ;vet
rortb iv tbe bava. of a vetror/ of ticit ava itticit bv.ive..e.) i. vot bavperea b, ivtettigevce ava ;vaiciat
avtboritie. fir.t. v tbe ca.e. rbere crivivat a..et vetror/. revaiv vvtovcbea, tbe 2001200 aata iv
tbi. paper .bor tbat crivivat grovp. ritt .ivpt, react to bigber epectea pvvi.bvevt. b, rea..igvivg
tbeir retatiret, vvtovcbea fivavciat re.ovrce. to epavaivg tbeir rivg. ;.cope ava .cate) of riotevce ava of
corrvptiov to bigber teret. of tbe pvbtic .ector. iv oraer to protect tbev.etre.. .. a re.vtt, orgaviea
crive ava bigb teret corrvptiov gror erev rbev tbe epectea pvvi.bvevt aivea at tbe vevber. of
crivivat evterpri.e. i. ivcrea.ivg at tbe .ave tive. 1be ;vrivetric.ba.ea re.vtt. iv 10 covvtrie. .bor
tbat, iv tbe ab.evce of av actire fivavciat ivtettigevceba.ea crivivat,cirit a..et. forfeitvre prograv, bigbteret
corrvptiov gror. rapiat, rbite, paraaoicatt,, pvbtic .ector. covtivve to aerote vore crivivat ;v.tice .,.tev
re.ovrce. to ivcarcerativg ivcrea.ivg vvvber. of orgaviea crive vevber.. .t tbe .ave tive, evpiricat
avat,.i. .bor. tbat bigber probabititie. of .avctiov. covbivea ritb .tiffer .evtevcivg gviaetive. ov tbe boo/.
agaiv.t orgaviea crive vevber. ao vot pta, tbeir ai..va.ire rote iv tbe ab.evce of prerevtire prograv. to
reavce tbe ftor of ,ovtb to crivivat grovp.. 1bi. cov.titvte. tbe paraao of crivivat .avctiov. rbere vore
freqvevt ava .tiffer pvvi.bvevt. apptiea to pb,.icat per.ov. teaa to bigber teret. of orgaviea crive ava to
bigber teret. of corrvptiov. 1be aeterioratiov of iv.titvtiovat perforvavce agaiv.t crivivat evterpri.e. iv
.fgbavi.tav ava Meico ava tbe recevt 2001200 .igvificavt ivprorevevt. eperievcea b, Cotovbia
ava ]oraav cav be eptaivea ;oivtt, b, fivavciat ivtettigevce, ;vaiciat capacitie., ava prerevtire capabititie.
cooraivatea b, pvbtic .ector. ava cirit .ocietie..


1. INTRODUCTION
1he 2000 United Nations` Conention against 1ransnational Organized Crime
,Palermo Conention, constitutes the most global international legal reerence
in the ight against organized crime. It contains legal, judicial, inestigatie,
intelligence, and preentie practices in the ight against organized crime.
2

Strongly inluenced by a relatiely small number o countries with a track
record in deeloping domestic laws and practices on the matter ,e.g., the
United States, lrance, 1he Netherlands, and Italy,, the Conention includes
special inestigatie techniques,
3
such as the use o controlled delieries,
electronic sureillance, collaborating,protected witness programs, and asset
oreitures.
4
1he Conention also enhances the capacities o States by oering
a ast-track judicial and legal international cooperation
5
with the purpose o
inestigating, prosecuting and processing organized crime groups.
lurthermore, the Palermo Conention addresses preentie measures
6
within
the anticorruption, priate sector, and ciil society domains.

1his paper aims at identiying and applying a unctional empirical ramework to
assess the impact o the Palermo Conention dierent degrees o
implementation within a sample o 10 UN member states. 1he legal and
economic analysis presented here tests the theoretical ramework generated by
Kugler, Verdier, and Zenou ,2004, and moes urther by ocusing on the
identiication o the institutional mechanisms that hae been proen to reduce
the gap between tbe tetter of tbe Covrevtiov and tbe actvat aove.tic tar. iv actiov within a
sample o 10 UN member states that hae already signed or ratiied the legal
instrument. Country-speciic cases o impact indicators are presented detailing
the actors enhancing,hampering eectie legal implementation within the
counter-organized crime judicial, inancial intelligence, and preentie areas. In
this context, this paper will show that those countries where prosecutions and
eectie conictions against the criminal organizations hae been more ocused
on disrupting the production unction o criminal enterprises-by reducing their
net worth aimed at expanding public corruption rings-hae also experienced
signiicant drops in organized crime leels as a result. At the same time,
preentie policies-aimed at diminishing the low o youth into criminal

2
lor the entire text o the Palermo Conention reer to
http:,,www.unodc.org,pd,crime,a_res_55,res5525e.pd.
3
Palermo Conention, Art. 20.2 and Art. 2,b,.
4
Palermo Conention, Art. 12.
5
Palermo Conention, Art. .4, Art. 12, and Art. 13.1
6
Palermo Conention, Art. 31.

Palermo Conention, Art. 8 and Art. 9.

actiities and preenting the illicit use o priate businesses by organized crime-
will be assessed in terms o their impact on reducing organized crime capacities.
1he analysis below ocuses on the transnational nature o the most serious
expressions o organized crime
8
and uses the theoretical ramework presented by
Kugler, Verdier, and Zenou ,2003,, in which oligopoly-drien market structures in
the hands o criminal organizations engage in competition by corrupting public
oicials in order to aoid punishment and acquire market power oer illicit
markets. Under a stronger public sector goernance ramework, proiding higher
eiciency salaries or public oicials and eectie anticorruption policies, one
could expect higher sanctions and higher probabilities o prosecution to work as a
deterrence eect. On the other hand, under a weak goernance enironment, the
traditional Becker ,1968, and Leitt ,1998, deterrence rameworks will tend to
increase leels o organized crime and corruption within the public sector. Under
this low-goernance situation, increasing policing and enhancing expected
sanctions will produce higher crime rates by making organized crime extend
corruption rings aimed at controlling their territories and eudalizing the state
domain in order to gain greater impunity and a reduction o actual expected
punishment. One should thereore expect that a higher requency o successul
prosecutions against illegal political campaign inancing and successul conictions
o high-leel corrupt judicial oicials will create the proper enironment or a
more eectie ight against organized crime groups.
1he globalization o socio-economic lie entails increasingly complicated
interactions among indiiduals and organizations at national and international
leels. lurthermore, the mix o democratization, deregulation, liberalization o
international trade, and the priatization o state enterprises undertaken in
many countries hae intensiied the need to adapt legal rameworks to the new
nature and scale o socio-economic interaction ,Buscaglia, 199:34,. lor
example, the eer-increasing porosity o national rontiers to international
human and inancial lows gies rise to new types and scales o criminal
behaior ,Buscaglia, 1994:30-31, Milhaupt and \est, 2000,. \ithin criminal
jurisdictions, globalization has a dark byproduct that is the result o combining
increasing cross-border porosity and the use o adanced technologies or
traicking and money laundering purposes by criminal enterprises ,Buscaglia,
2001:235-239,. In this context, there is an increasing need or the eectie

8
Compiled data show that the most requent organized crimes are ranked ,rom top to bottom,
as drug traicking and smuggling o irearms, irst and second, respectiely, smuggling o cigarettes,
car thet, consumer raud ictimization ,the International Crime Victim Surey,, and traicking o
human beings ,human traicking database o the UN Oice on Drugs and Crime,. Statistical tables
showing the results o the study presented here can be ound at:
bttp:,,aerecbo.itav.v,facvttaa,facvttaa_ivritaao._bv.cagtia.btvt.


implementation o a common legal ramework to be designed, interpreted, and
enorced in a consistent, coherent, and predictable manner within nation states
and across international borders through legal,judicial cooperation ,Buscaglia,
1995:10-14,.
1he preentie, law enorcement, judicial, and intelligence legal tools instilled
within the Palermo Conention, when ratiied by a state, proide the potential
or the most comprehensie set o policy measures to address organized crime
,Buscaglia, Gonzalez-Ruiz, and Ratli, 2005:13,. \et, as \atson ,198,, Seidman ,198,
and Berkowitz, Pistor, and Richard ,2003, show, most countries hae
transplanted international rameworks into their domestic legislations with
dierent degrees o success in their later implementation. 1he success o the
legal transplant is mostly determined by the nature o the process used to adapt
the legal instrument to the public,priate institutional structure o the
importing country and by legal idiosyncrasies o the domestic judicial
enironment. Berkowitz, Pistor, and Richard ,2003, hae also shown that prior
amiliarity with the transplanted legal instrument, gradual adaptation o the
transplant to the local legal context, and the later requent use o the legal
instrument by legal intermediaries ,e.g., judges and prosecutors, will drie more
eectie implementation. 1ransplanting legal rules and standards ound within
the Palermo Conention into domestic legislations and legal practice is no
exception to this general rule.
1.1. PRE-CONDITIONS FOR IMPLEMENTATION OF THE PALERMO CONVENTION
Abundant research has shown the signiicant positie impacts o a rule o law
state on economic well being ,layek, 1960, 193, North, 1988, Buscaglia, 1994:158,
Mauro, 1995:5-60, de Soto, 1996:12-14, and Buscaglia and Dakolias, 1999,. lor the purposes
o the analysis contained here, a rule o law state consists o a social
enironment within which the enactment o ormal and inormal rules, their
interpretations, application, and their enorcement operate in a coherent,
consistent, and predictable manner through eectie and eicient adjudication
systems backed by a social consensus ,layek, 193,. As a deriation o this
general condition, organized crime emerges as a direct result o a partial or total
break-down o the rule o law within a society. 1hereore, a society and state
need to irst take measures towards establishing a rule o law state in order to
eectiely counteract organized crime as a beneicial direct,indirect by
product. \orld Bank data show that under the gradual presence o increasing
leels o oice and accountability` within the public sectors, ciil societies will
be able and willing to build eectie social control mechanisms that will


reinorce the state`s capacity to preent and ight crime.
9
But when
unaordable licit and illicit costs are imposed on indiiduals and organizations
by rapacious public oicials through corrupt transactions, when unpredictable
regulatory rameworks are applied to lie and property ,see Milhaupt and \est,
2000,, and,or when inconsistent applications o the laws are the norm, then
systemic and high leels o organized crime ind the natural enironment to
grow and prosper. In this pernicious context, the national political structures
and electoral systems that beneit rom the inancial iniltration o criminal
unding need to be irst reormed through greater transparency and much
stronger political competition aimed at the possible replacement o the
incumbent political actors beore sustainable legal and judicial reorms aimed at
ighting organized crime are achieed. \et, such legal and judicial reorms tend
to play against the interests o the political incumbent, thus blocking change.
Under such circumstances, a generalized institutional crisis, where the state is
perceied as not being able to conront criminal groups, can act as a catalyst o
meaningul reorms. 1hese crisis situations can be sometimes characterized by
high leels o organized crime-related iolence and entrenched public sector
corruption at all leels aecting the well-being o the aerage oter. 1hese
types o institutional crises tend the challenge the priileged political position
o incumbents orcing them to choose between a crisis-prone .tatv. qvo that
could cost them dearly in the next election, and the acceptance o legal,judicial
reorms that could cost them dearly in the longer term, by limiting their
capacities to beneit rom illicit unding o their campaigns.
Many deeloped and deeloping countries hae attempted to reorm their
laws and judiciaries as a result o their political and social eorts to strengthen
democracy, to enhance the protections o human rights and to oster priate
sector inestment. \et, within the ciil and criminal justice domains, an
international comparatie analysis demonstrates that legal and judicial reorms
hae shown mixed results around the world ,Buscaglia and Dakolias, 1999:4,. In this
context, dysunctional or limited judicial capacities to enorce and apply laws
within the police, prosecutorial, and judicial domains are still serious
impediments to enhancing public sector goernance ,Buscaglia, 2001:245,.
Using a smaller sample o 6 UN member states, Buscaglia, Gonzalez-Ruiz,
and Ratli ,2005, show that transnational organized crime represents a constant
source o poor public sector goernance within the judicial system sectors
worldwide. Moreoer, organized crime is among the three most important
actors associated with war and conlicts in Arica, Asia, Latin America and the

9
See http:,,web.worldbank.org,\BSI1L,LX1LRNAL,\BI,LX1\BIGOVAN1COR,0,,content
MDK:201165~menuPK:1866365~pagePK:64168445~piPK:64168309~theSitePK:140530,00.html.


Middle Last ,Buscaglia, 2001,. In this context, the Palermo Conention against
1ransnational Organized Crime has aimed at promoting uniorm standards o
international legal and judicial cooperation in order to to preent and combat
transnational organized crime more eectiely` ,Art. 1 Statement o
Purpose,.
10
1he law and economics o deelopment approach applied here
aims at identiying legal enactments, improements in the scale and scope o
inancial intelligence operations leading to coniscation o criminal assets
,within the licit and illicit domains, , and improements in the interpretation
and application o criminal statutes that hae been able to reduce the growth o
organized crime worldwide. Accordingly, one key aspect in the law and
economics o growth,deelopment literature applied to this paper ocuses on
identiying the characteristics o legal and judicial systems that are able to
reduce organized crime as ,Buscaglia, 199:15-25,. \ithin this discipline and based
on empirical studies perormed during the past ten years in 10 countries, the
analysis below aims at accounting or the necessary conditions within the
preentie, inancial intelligence, and judicial systems that need to be present in
order to combat organized crime with more eectieness.
1.2. INSTITUTIONAL FEASIBILITY OF LEGAL TRANSPLANTS AND
ECONOMIC EFFICIENCY
1here are two main choices or a country when selecting the source o its laws.
A country can adopt a law rom within the eolution o its own socio-juridical
tradition implemented through its own institutional mechanisms, or it can
transplant rules rom outside its political-legal zone o dominance ,\atson,
198,,. A key need in the analysis o legal transplants is to determine a
ramework or predicting which o the two options is the most eectie to
enhance the expected impact o the law. \atson ,198, and Berkowitz, Pistor,
and Richard ,2003, hae shown the genesis and eolution o legal reorms
linked to transnational transplants. 1hereore, one should also aim at
explaining why, rom an international pool o laws aailable or transplant,
certain rules and institutions are commonly used and later enacted in dierent
jurisdictions while others are rejected.
1o a greater or lesser degree, adopting the Palermo Conention requires a
study o the easibility o transplanting its clauses within domestic legal
jurisdictions. 1he adoption o an internationally common legal understanding
o transnational organized crime, operationally deined, as a .trvctvrea grovp of
tbree or vore per.ov., ei.tivg for a perioa of tive ava activg iv covcert ritb tbe aiv of

10
lor the entire text o the UN Conention, reer to http:,,www.unodc.org,pd,crime,
a_res_55,res5525e.pd.


covvittivg ove or vore .eriov. crive. or offevce. e.tabti.bea iv accoraavce ritb tbi.
Covrevtiov, iv oraer to obtaiv, airectt, or ivairectt,, a fivavciat or otber vateriat bevefit
,Article 2,
11
entailed treading towards the adoption o a common ramework
or legal and judicial cooperation. Beore the signing o this UN Conention in
the city o Palermo ,Italy, in 2000, only 3 percent o all UN members
possessed dierse legal deinitions o organized crime within their domestic
statutes. By 200, 138 signatories had ratiied the Conention and 8 percent
o all UN member states hae adopted a legal deinition o organized crime
that is compatible with Article 2 aboe. Moreoer, and in accordance to Article
32 o the United Nations Conention against 1ransnational Organized Crime,
member states established a Conerence o State Parties to the Conention
with a mandate to improe the capacity to ight transnational organized crime
through monitoring and technical assistance in the implementation o the
Conention. 1his also represents a coordinated institutional ramework to
ensure the international transplant o a legal instrument.
1he economic analysis o the law can proide an explanation and guide or
legal transplants by applying tests to determine i the legal rules transplanted are
also the most politically easible choices or a subsequent eicient and eectie
implementation. In this case, an inter-temporal political cost-beneit analysis
applied within each legal jurisdiction could proide an explanation o why 8
percent o all UN member states hae already adopted domestic legal statutes
complying with the UN Conention. Legal reorms are subject to the normal
political supply and demand exercised by pressure groups rom within or rom
outside the State ,Mattei, 199:34-3,. In other words, public,priate interests
groups ,licit or criminal groups, that may eel threatened or beneit by
alterations in the incumbent legal system may be all ultimately partly
responsible or the eectie legal application, interpretation, and enorcement
o new laws. 1hat is, the costs and beneits assessed by these groups may
ultimately explain the success or ailure in legal enactments and
implementations. Adopting this group-based cost-beneit analysis to the
context o the Palermo Conention, the economic eiciency hypothesis
proposes that dierent legislatures may compute the costs and beneits o legal
rules dierently because initial economic and goernance actors ,such as
electoral rules or anti-public sector corruption programs, are dierently
supported and delineated across dierent regions and nations. Under this
scenario, legal jurisdictions and legislatures with lower leels o organized crime
iniltration within the public sector and, thus, less corruption ,i.e., high-quality
goernance, are more willing to accept the Palermo Conention as a transplant

11
At http:,,www.unodc.org,pd,crime,a_res_55,res5525e.pd ,p. 4,.


and, accordingly, enact,implement legal measures against organized crime with
more speed and eectieness.
During the 190s, a leading group o pioneer countries such as lrance,
Germany, Italy, 1he Netherlands, the United Kingdom, and the United
States o America sought a common international legal ramework to be
transplanted to other countries in order to combat criminal enterprises
through international legal,judicial and operational mechanisms. loweer,
the ery legal deinition o organized crime represented, at irst, a barrier to
an international agreement. In the legal domain, a ew countries successully
pioneered the enactment o legal measures that criminalized conspiracy to
commit a crime ,e.g., the United States,. Other national jurisdictions
criminalized membership or participation in criminal enterprises ,e.g.,
lrance,. Illicit association as a orm o criminal actiity has been introduced
into many criminal codes around the world, particularlly in lrance, Italy,
Spain, and in Latin America.
12
Other countries had established crimes
committed by groups as criminal oences. In Italy, these are called
associated crimes` or Maia-type crimes.` In the United States o America,
legislators enacted the Racketeer Inluenced and Corrupt Organizations
Statute ,the so-called RICO statute,, which prohibits engaging in an
enterprise inoled in a pattern o criminal actiity ,racketeering,. In the case
o the US, under conspiracy law and the Racketeer Inluenced and Corrupt
Organizations Act,
13
judicial criteria indicate that a RICO enterprise` must
entail an organizational structure that carries on its business by means o
actiities that are primarily criminal and where there is a high degree o
probability that the criminal actiities will continue in the uture. In all o
these country-speciic laws, the judicial capacity to dismember a criminal
organization was greatly enhanced by the enactment o such innoatie
statutes.
14

At the same time, law enorcement agencies in Lurope deeloped a
number o operational deinitions o the term organized criminal group` in
order to produce intelligence aimed at generating eidentiary material as part

12
lor participation in a criminal association, see the lrench Criminal Code, 1itle V, articles
450-1-450-4, the Italian Penal Code, Royal Decree No. 1398 o 19 October 1930, articles 416,
Association or purposes o committing oences,` and 416 bis, Maia-type association,` and
the Spanish Criminal Code, articles 515 and 516, on illicit association.
13
18 U.S. Code sect. 31, and 15,630 under 21 U.S. Code sect. 846 or sect. 963 and Racketeer
Inluenced and Corrupt Organizations Act, Pub. L. No. 91-452, 901,a,, 84 Stat. 941 ,190,.
14
18 U.S. Code sect. 31, and 15,630 under 21 U.S. Code sect. 846 or sect. 963 and RICO Act,
Pub. L. No. 91-452, 901,a,, 84 Stat. 941 ,190,..


o judicial proceedings against criminal enterprises. 1hese deinitions agreed
that such a group must be structured, must possess some degree o
permanence and continuity through time, must commit serious crimes or
proit, must use iolence, must corrupt public oicials, must launder
criminal proceeds and must be ound to reinest these proceedings in the
licit economy. Common Luropean operational approaches were adopted by
law enorcement. 1he lalcone checklist` is such an example.
15
In addition,
three supplementary protocols to the Palermo Conention were adopted,
one dealing with the traicking in persons, the second one with the
smuggling o migrants and the third one with the traicking in irearms.
16

2. EMPIRICAL FRAMEWORK
In order to assess the process o modernization o law enorcement and judicial
capacity to implement organized crime laws within any chosen jurisdiction, and
based on the best practice experience o the national jurisdictions mentioned
aboe, one needs to proide an objectie analysis o the institutional effectireve.. o
the court, prosecutorial, intelligence and police subsystems. In this case, an
assessment o the institutional effectireve.. to counteract organized crime must use
an empirical model to account or the main actors identiied by Buscaglia and
an Dijk ,2003, and Kugler, Verdier, and Zenou ,2003,. 1he model, based on
components 1 through 8 below, captures the theoretical ramework deeloped
by Buscaglia ,199, and Kugler, Verdier, and Zenou and moes urther by
aiming at the account o the missing links explaining the expansion o corruption
rings protecting` organized crime rom inestigation,prosecution while also
coering preentie aspects linked to criminal enterprises.
\ithin the aorementioned theoretical context, the ollowing explanatory
ariables will be jurimetrically assessed below:
1. 1he quality o judicial decisions measured through the aerage requencies
o legal errors ound in organized crime case-iles ,i.e., lack o legal
oundation and motiation within court rulings ocused on transnational
organized crime case-types, during the period 2003-200. ,1his ariable
assesses the implementation o Art. 29 o the Palermo Conention,,

15
1he lalcone ramework is a checklist ,used as an operational guideline by prosecutors in
many countries, that proides an account o organized criminal groups operating within a certain
jurisdiction by describing the composition, structure, modus operandi, licit,illicit linkages and
other important aspects necessary or the inestigation and prosecution o criminal networks.
lor more details on this matter, reer to Gonzalez-Ruiz and Buscaglia ,2002,.
16
1o access the text o the three Protocols, reer to http:,,www.unodc.org,pd,crime,
a_res_55,res5525e.pd.


2. 1he public sector corruption composite index based on three perceptional
and one objectie criminal indicator or the period 2003-200 measuring
requencies o organized crime case-iles within which high leel
corruption ,i.e., capture o high-leel authorities, is judicially motiated
based on eidentiary material ,assessing the implementation o Art. 8 y
Art. 9 o the Palermo Conention,,
3. 1he monetary alue o transnational organized criminal assets oreitures
during the period 2003-2006 ,assessing the implementation o Art. 12 o
the Palermo Conention,,
4. 1he existence o counter-organized crime ield specialization and training
o personnel within the police and prosecutorial domains during the
period 2003-2006 ,assessing the implementation o Art. 14.3 ,a, and Art.
29.2 o the Palermo Conention,,
5. 1he existence o an operationally coordinated inancial intelligence and
criminal justice system inrastructure jointly addressing organized crime
case-iles during the period 2003-200 ,assessing the implementation o
Art. 2,a, and ,d, o the Palermo Conention,,
6. 1he processing capacity o inancial intelligence units or the period 2003-
2006 ,number o pro-actie and reactie intelligence reports issued as a
percentage o domestic and transnational organized crime prosecutions,
that are later relected in judicial resolutions as part o proceedings
,assessing the implementation o Art. .1 ,b, o the Palermo Conention,,
. Number o instances in which the country engaged in international
judicial cooperation or the purposes o handling transnational organized
crime case types during the period 2003-2006 ,assessing the
implementation o Art. 12 -linked to oreitures-, Art. 16.5 ,b,, Art. 20.2
and Art. 2 ,b, o the Palermo Conention,,
An eighth ariable is introduced accounting or preentie measures linked to
organized crime.
8. 1he ariable coering Preention` policies measures the number o
goernment and,or non-goernmental programs ,unded by goernments
and,or international organizations, addressing technical cooperation with
the priate sector organizations ,e.g., banks,, educational and,or job
training programs and,or rehabilitation ,health and,or behaioral, aspects
o youth linked to organized crime in high-risk areas ,with high-crime,
high unemployment, and high poerty, in each o the 10 countries


sampled or this study ,assessing the implementation o Art. 31 o the
Palermo Conention,.
Components 1 through 8 aboe constitute areas o counter-organized crime
instilled within the Palermo Conention. A ramework o hypotheses to
analyze the impact o each component on an indicator o organized crime
actiities will be presented in the next section.
3. JURIMETRIC ASSESSMENT OF THE FACTORS
LINKED TO COUNTER-ORGANIZED CRIME
In this section, tests o the hypotheses are presented in order to explain to
what degree the percentage changes in the organized crime leels detailed
within the data base o 10 national jurisdictions are aected by high leel
corruption ,i.e., eudalization o the state,, lack o goernance within the
judicial and intelligence systems` domains, and lack o preentie measures
ocused in high-risk areas.
1o measure the prealence o organized crime in 10 countries, the index o
complex crimes irst presented in Buscaglia and an Dijk ,2003, and Buscaglia,
Gonzalez-Ruiz and Ratli ,2005, has been modiied ,and the sample has been
expanded here rom 6 to 10 countries,.
1
1he deelopment o an international
index o organized crime starts rom the agreed upon deinition discussed in the
preious section. 1he extent o organized crime in each o the 10 countries was
assessed on the basis o indicators o the arious deining elements contained
both in operational inestigations conducted by law enorcement agencies and
judicial authorities within the rame o a Checklist denominated lalcone
Checklist.`
18
1he lalcone checklist is an inestigatie tool sering the purpose o
proiding an operational, structural, and illicit-markets account o organized
criminal groups operating within a certain jurisdiction. 1he Checklist describes
the composition, structure, modus operandi, licit,illicit linkages and other
important aspects necessary or the inestigation and prosecution o criminal
networks. In addition, the scope o organized crime is here ramed within the
Palermo Conention and its three protocols.
Oicial data on police records o criminal actiities oered little reliable
inormation on the extent o organized crime actiity in a country and other
sources had to be ound or deeloped as primary data. One potentially releant

1
Palermo Conention, Supplementary Protocols, see n 1
18
lor more details, see Buscaglia and Gonzalez-Ruiz ,2002,. 1he lalcone Checklist was named
in honor o Judge Gioanni lalcone, assassinated by the Maia in Italy.


source was the \orld Lconomic lorum`s surey o businesses measuring the
costs imposed by organized crime on irms, which proided an estimate o the
extent o ictimization o businesses by organized crime. 1he country ranking
based on the \orld Lconomic lorum`s index was subsequently correlated with
indices o organized crime-related iolence ,homicides,. 1he three indices were
ound to be highly correlated across the large group o countries presented on the
Graph below and, as a result, a composite index o non-conentional crime was
constructed. It was subsequently decided to seek additional aailable country data
on 25 core criminal actiities o organized criminal groups such as credit card
raud, traicking in drugs, traicking o persons, countereiting o goods and
serices, smuggling, illicit traicking o irearms, stolen cars and cigarettes. In
particular, data were compiled on smuggling o irearms ,taking into account data
on manuacturing, sales, imports and exports already computed by the United
Nations,, estimates on smuggling o cigarettes, car thet and consumer raud
ictimization ,the International Crime Victim Surey,, countereiting o
goods,serices and the number o homicides ,the United Nations, the
International Criminal Police Organization ,Interpol, and the \orld lealth
Organization,, size o the inormal economy and the business sector`s perceptions
o organized crime prealence ,\orld Lconomic lorum,, inlows o laundered
money in millions o dollars per year as a proportion o gross domestic product
,the \alker index, and traicking in persons in terms o nationalities o suspects
,human traicking database o the United Nations Oice on Drugs and Crime,.
19

1he index presented here ranked each country or each ariable in order to
compute the composite organized crime index as an aerage o the rankings that
each country showed or each criminal actiity mentioned aboe. Lach
component showed strong correlations with the index, with costs to business,
homicide, drug traicking, and money laundering being the best predictors.
20
1he
indicator or drug traicking, estimated through the ranked-leels o trans-border
transportation o illicit drugs, did show correlation with the other organized crime
actors mentioned aboe and was subsequently included or the irst time.
21

linally, a composite index was constructed that included indicators o six core

19
Reer to http:,,www.unodc.org,pd,crime,a_res_55,res5525e.pd and to
http:,,web.worldbank.org,\BSI1L,LX1LRNAL,\BI,LX1\BIGOVAN1COR,0,,contentMD
K:201165~menuPK:1866365~pagePK:64168445~piPK:64168309~theSitePK:140530,00.html.
20
1he index considered here only included those countries or which there were at least three
obserations, out o which at least two were core actiity` actors. ligher alues corresponded
to greater prealence o organized crime. See n. 21 at 56.
21
1his represents a change o methodology in the calculation o the index with respect to
Buscaglia and Van Dijk ,2003, and Buscaglia, Gonzalez-Ruiz and Ratli ,2005, where drug
traicking was excluded due to the lack o reliability o police reports o seizures.


actiities ,traicking in persons, drugs, irearms, stolen cars and cigarettes and
raud,. 1his composite index o percentage changes in organized crime is
measured on the ertical axis o the graphs below.
1he measures o judicial errors ound in case iles were calculated ater
reiewing a sample o between 10 and 12 percent o each o the countries`
annual lows o criminal case-iles inoling transnational criminal groups. 1he
index o judicial errors calculates the annual requency o legal errors caused by
lack o proper legal oundation and,or lack o motiation ound within
prosecutorial indictments and judicial rulings.
1he horizontal axis on the graph below measures the requencies o judicial
errors ound, within actual disposed criminal case iles in each o the 10 national
criminal jurisdictions examined, by identiying the aerage requency o abuses o
procedural and substantie errors caused by lack o proper legal oundation and
motiation. 1he most requent abuses included contradictions in the alue or
weight attached by the judge,prosecutor to the eidentiary material that
represented a contradiction with the preailing doctrines and jurisprudence. 1he
most requent substantie abuse o judicial discretion were ound in case-iles
where the criminal acts did not it the criminal code-related categorization o the
indicted crimes ,e.g., simple homicide indictments in cases where the eidence
points at three or more conspirators operating in a concerted manner oer a
period o time,. Other abuses included unjustiied procedural delays,
contradictory uses o the jurisprudential criteria within the same case-types
sampled within the same criminal court, and the use o irreleant jurisprudence
or unrelated ,i.e., incorrect, laws to support judicial rulings.
As one can see rom the graph ound on the next page, by measuring changes
in the organized crime leels and errors in judicial rulings with a two-year lag,
there is a relationship between more consistent and more coherent judicial
rulings linked to reductions in organized crime leels ,e.g., Belgium,. 1hese
improed consistency and coherency is assured by eectie judicial decision-
making control systems applied to rulings by either judicial councils or
appellate court systems. On the other hand, those countries that were ound
lacking in consistency and coherence in their rulings ,i.e., high requencies o
abuses o judicial discretion, are also countries where organized crime presents
high leels ,e.g., Indonesia and Venezuela,.



0 10 20 30 40 50 60 70 80 90 100
JUDERRORS
60
120
O
R
G
C
R
I
M
E
Afghanistan
Venezuela, R
Pakistan
Equatorial G
Russian Fede
Ecuador
Nigeria
Romania
Cote d'Ivoir
Lebanon
Moldova
East Timor
Honduras
Indonesia
Mexico
El Salvador
Belarus Zimbabwe
Guatemala
Egypt, Arab
Serbia
Paraguay
Dominican Re
Bolivia
Zambia Mozambique
Yemen, Rep.
Mongolia
Morocco
Cyprus
Algeria
Macao, China
Albania
China
Argentina
Ukraine
Vanatu
Brazil
Nicaragua
Nauru
Croatia
Thailand
Philippines
Namibia
Peru
Iran, Islami
Andora
Kenya
Bulgaria
India
Barbados Slovak Repub
Estonia
Bahamas, The
Costa Rica
Oman
South Africa
Poland
Uzbekistan
Sri Lanka Portugal
Malaysia
Panama
Jamaica
Puerto Rico
Uganda
Italy
Belgium

Moreoer, substantie laws are ound during audits o court rulings
,sometimes perormed by judicial councils, and appeals where, or example,
case-related acts are systematically not adjusted to the required indictment
within the criminal codes or within the specialized organized crime,money
laundering laws. 1hese and other types o abuses o judicial discretion
constitute the main actor hampering eectie legal implementation within the
judges` domain, thereby causing an increasing gap between the law-on-the-
books and the legal implementation o these statutes.
A ariable measuring high-leel corruption ocuses on the requency o abuse
o public high-oice at the local leel ,2181 local jurisdictions, and within 10
central leels o goernments. 1his high leel corruption composite index was
drawn rom a surey o 10 to 15 percent o all users ,o indiiduals and
businesses interacting with the sampled local and central States, and a
representatie organized crime case iles coering the ollowing our areas: ,i,
perception o nepotism and cronyism in high-leel political and judicial
appointments, ,ii, the eudalization ,organized crime members becoming


politicians, in local goernment ,i.e. organized crime protection by local and
central goernment public oicials,, ,iii, the court users` perception o biased
judicial rulings in criminal cases ,that, in our present analysis, shows a strong
and signiicant 0.89 Spearman indicator correlation with the objectie
assessment o requencies o judicial errors ound in the analysis o actual case
iles ,explained aboe, sampled or this study,, and ,i, an objectie ,non-
perceptional, indicator measuring the proportion o organized crime case iles
within which corruption-related links with public oicials were judicially
determined. 1he our indicators show a 0.91 Spearman correlation index ,high,
and are thereore grouped with equal weights within a composite index o
high-leel corruption used below. 1he graph below shows the close parallels
between the composite index measuring high-leels corruption and the
composite index o organized crime or 10 national jurisdictions. 1hese
results proide support to the theoretical indings o Kugler, Verdier, and
Zenou ,2003, where there is a need o organized crime groups to expand its
rings o public sector corruption in order to sustain and expand their leels o
criminal actiities. In this context, the traditional deterrence ramework
proided by Becker ,1968, would not render its expected results. lor example,
Aghanistan, Pakistan, and Mexico show the largest proportions o perceied
nepotism and state capture coupled with killings o public oicials by
organized crime groups that go unresoled without any arrests or indictments.
1his ineectieness o the judicial system can be explained by the high leels
o organized crime iniltration within the police and prosecutorial domains
,Buscaglia and Gonzalez-Ruiz, 2002,.


0 20 40 60 80 100 120
HICORRUPT
60
120
O
R
G
C
R
I
M
E
Afghanistan
Pakistan
Equatorial G
Nigeria
Lebanon
East Timor
Cote d'Ivoir
Albania
Indonesia
Paraguay
Guatemala
Yemen, Rep.
Mexico
Ecuador
Cyprus
Algeria
Venezuela, R
Zimbabwe Belarus
Peru
Egypt, Arab
Argentina
Vanatu
South Africa Uzbekistan
Bolivia
Russian Fede
Malaysia
Philippines
Jamaica
Serbia
Brazil Croatia
Mozambique Zambia
Morocco
Mongolia
Ukraine
Romania
Nauru
Iran, Islami
Namibia
Nicaragua Thailand
India
Slovak Repub
Dominican Re
Moldova
Andora
Kenya
Honduras
Macao, China
Bahamas, The
China
El Salvador
Bulgaria
Costa Rica
Oman
Barbados
Puerto Rico
Poland
Estonia
Sri Lanka Portugal
Panama Uganda
Italy
Belgium


A third dummy ariable aimed at explaining ariations in organized crime leels
ocuses on the presence or absence o specialized police and prosecutors trained
or the purpose o conducting inestigations, generating complex ,e.g., inancial,
eidence and prosecutors issuing indictments against organized crime.
A ourth ariable assesses the presence o explicit o inter-institutional
coordination through a dummy ariable that accounts or the presence o
specialized prosecutors and police conducting the inestigation jointly through
a task-orce approach supported by a inancial intelligence agency proiding
inputs or the indictment and judicial ruling ,\es~1, No~0,.
A ith ariable measures the capacity o the inancial intelligence unit to
generate reports that are later incorporated within court proceedings.
Gien that preious explanatory ariables accounting or the eectieness o
the judicial and inancial intelligence systems ,i.e., judicial system specialization,
judicial system coordination, quality o judicial resolutions, and capacity o the
inancial intelligence unit to instill their analysis within court decisions, present
a pattern o high and signiicant correlations among them, ater perorming
actor analysis, a composite index o these our ariables was deeloped
measuring the judicial and inancial intelligence ineectieness in prosecuting
and processing organized crime ,JUDIN1S\SIN,.



1he graph below shows the clear pattern o association between the
composite index o organized crime ,ORGCRIML, and the composite index
o joint judicial and intelligence systems ineectieness ,JUDIN1S\SIN,. 1he
composite index measures joint judicial and intelligence systems ineectieness
when States simply add more inancial intelligence oicials, more prosecutors,
more police, and more judges with the aim o increasing the expected sanctions
o criminal groups, but without coordination, without specialization and with a
poor record o systematic coniscations ,i.e., without task orces o judges,
prosecutors, specialized police and inancial intelligence oicers working
together on speciic cases aimed at dismantling networks o criminal assets
linked to licit and illicit business,. As one can see within the graph below, the
lack o coordinated programs inoling judicial coniscations o criminal asset
networks ,i.e., more ineectieness,, een in the presence o increasing
numbers o judicial system and military resources, will cause a paradox o
expected punishment to occur.
1he paradox o expected punishment occurs when states aim at increasing the
expected punishment by simply adding more human resources to the physical
capture o criminal bosses and other members without aiming at the
dismantling the criminal asset networks and at the attacking o high leel
corruption at the same time. In the cases where criminal asset networks remain
untouched, the data show that criminal groups will simply ace the higher
expected punishments o its high-leel members by re-assigning their relatiely
untouched inancial resources to expanding their rings ,scope, and scale o
corruption at higher leels and added iolence in order to protect themseles.
As a result, organized crime and high leel corruption expand een when the
expected punishment aimed at criminal membership is increasing at the same
time. 1he jurimetrics-related analysis here shows that unless the our legs o
counter-organized crime strategies - i.e. ,i, attacking high leel corruption, ,ii,
dismantling the criminal asset networks linked to the licit and illicit economy,
,iii, criminal actions against the top-ranking capos, and ,i, the dismantling o
criminal armed groups - are implemented at the same time, the paradox o
expected punishment will still preail. 1he JUDIN1S\SIN ariable shown in
the graph below measures the country by country requencies o organized
crime case-iles that apply this our-prong strategy. 1he graph below also
conirms that piece meal eorts undertaken by public authorities are associated
with poor results in terms o diminishing organized crime operations. A
separate explanatory ariable ,LOGCONlISC, included in a regression below
measures each o the 10 countries` monetary alues o asset oreitures rom
transnational criminal groups or the period 2004-2006.



0 5 10 15 20
JUDINTSYSIN
60
120
O
R
G
C
R
I
M
E
Belgium
Uganda
Panama
Italy
Venezuela, R
Afghanistan
Pakistan
Equatorial G
Russian Fede
Romania
Lebanon
Nigeria
Moldova
Indonesia
Mexico
Honduras
Belarus Zimbabwe
El Salvador
Guatemala
Ecuador
Paraguay
Egypt, Arab
Serbia
Zambia Mozambique
Cote d'Ivoir
Bolivia
Yemen, Rep.
Dominican Re
Mongolia
East Timor
Morocco
Cyprus
Algeria
Macao, China
Ukraine
Nicaragua
China
Thailand
Vanatu
Brazil Croatia
Albania
Andora
Nauru
Philippines
Argentina
Peru
Namibia
Kenya
Iran, Islami
India
Barbados
Estonia
Slovak Repub
Bulgaria
Poland
Bahamas, The
Sri Lanka Portugal
Oman
Costa Rica
Puerto Rico
Uzbekistan South Africa
Jamaica Malaysia


1he model presented here also includes an explanatory ariable accounting
or the presence or absence o organized crime-related preentie programs.
1his ariable measures the number o goernment and,or non-goernmental
programs ,unded by goernments and,or international organizations,
addressing technical cooperation with the priate sector organizations ,e.g.,
banks,, educational and,or job training programs and,or rehabilitation ,health
and,or behaioral, aspects o youth linked to organized crime in high-risk
areas ,with high-crime, high unemployment, and high poerty, in each o the
10 countries sampled or this study ,assessing the implementation o Art. 31
o the Palermo Conention,. As one can see rom the graph below, the
unctional presence ,in the ield, o a larger number o these dierse preentie
programs is associated with a clear pattern o percentage reductions in
organized crime. 1he linear correlation proided by the Pearson index shows
an impressie 0.881.



12 24
PREVENTION
-100
0
100
200
O
R
G
C
R
I
M
E
Equatorial G
Mexico
Pakistan
East Timor
Ireland
Germany
Liechtenstei
India
Iceland
Finland
Denmark
United State
Austria
Canada Israel
Australia
Luxembourg
Greece
United Kingd
France
Sweden
Hungary
Switzerland
Lithuania
Hong Kong, C
Netherlands
Chile
NewZealand
Saint Lucia Saudi Arabia
Seychelles
United Arab
Japan
Qatar
San Marino
Spain
Czech Republ Colombia
Jordan
Korea, Rep.
Singapore
Slovenia Latvia
Malta
Estonia
Portugal Sri Lanka
Puerto Rico
Belgium
Andora
Poland
Barbados
Egypt, Arab
Costa Rica
Uganda
Bahamas, The
Italy
Bulgaria
South Africa
Thailand
Oman
Iran, Islami
China
Slovak Repub
Ukraine
Vanatu
Jamaica
Cyprus Nauru
Kenya
Nicaragua
Dominican Re
Norway
El Salvador
Uzbekistan Macao, China
Algeria
Namibia
Honduras
Zimbabwe
Brazil
Malaysia
Ecuador
Peru
Croatia
Mongolia
Bolivia
Belarus
Philippines Zambia
Panama
Albania
Mozambique
Venezuela, R
Serbia
Argentina
Paraguay
Romania
Moldova
Morocco
Guatemala Russian Fede
Yemen, Rep.
Lebanon
Afghanistan
Indonesia
Nigeria
Cote d'Ivoir

1he assessment also includes a ariable measuring the requency o criminal
cases linked to organized crime deeloped through international judicial
cooperation ,IN1 COOP, as mandated in Articles 12, 16.5,b,, 20.2 and 2 ,b, o
the Palermo Conention. 1he graph below shows the strong association between
the degree by which countries engage in international judicial cooperation ,e.g.,
extraditions and asset oreitures, and their leels o reduction experienced in
organized crime leels. As one can see, higher requencies o international
judicial cooperation when handling transnational organized crime case types is
closely associated with reductions in organized crime leels ,e.g. In Colombia, a
45 percent reduction in organized crime is linked to a USD >10,5 billion increase
in asset oreitures and coniscations,.


12 24 36 48
INTCOOP
-100
0
100
200
O
R
G
C
R
I
M
E
Venezuela, R
Pakistan
Equatorial G
Mexico
Liechtenstei
Norway
Sweden
Switzerland
Netherlands
Ireland
Spain
Saudi Arabia
Germany
Israel
San Marino
United State
Qatar
New Zealand
Saint Lucia
United Arab
Singapore
United Kingd
Japan
Slovenia
Finland
India
Seychelles
Denmark
Chile
Malta
Luxembourg
Greece
France Korea, Rep.
Jordan
Hong Kong, C
Lithuania
Iceland
Latvia
Czech Republ
Canada
Austria
Hungary
Colombia
Australia
Sri Lanka
Afghanistan
Andora
Poland
Nicaragua Italy
Puerto Rico
Costa Rica
Estonia
Kenya
Portugal
Egypt, Arab
Namibia
Peru
Oman
Morocco
Uganda Panama
Thailand
Paraguay
El Salvador
Mozambique
Barbados
Bahamas, The
Bulgaria
South Africa
Malaysia
Uzbekistan
Jamaica
Macao, China
Dominican Re
Slovak Repub
Honduras
Lebanon
Nauru
Croatia
Mongolia
Brazil
Albania
Zimbabwe
Cyprus
Philippines
China
Argentina
Cote d'Ivoir
Ukraine
Iran, Islami
Ecuador
Belgium
Vanatu
East Timor
Guatemala
Serbia Zambia
Yemen, Rep.
Romania
Bolivia
Russian Fede
Indonesia
Nigeria
Algeria
Belarus


Now this empirical ramework moes urther by testing the degree to which
the joint eects o high-leel corruption ,LOG lICORRUP1,, judicial and
intelligence ineectieness i.e. as a composite index including judicial system
specialization, judicial system coordination, quality o judicial resolutions, and
capacity o the inancial intelligence unit to instill their analysis within court
decisions ,LOG JUDIN1S\SIN,, lack o international judicial cooperation
,LOG IN1 COOP,, weak asset oreiture programs ,LOG CONlISC,, and
lack o preentie programs ,LOG PRLVLN1ION, hae a signiicant eect
on the leels o organized crime ,measured through its natural log,.
Ater testing or the compliance with regression assumptions, the analysis
shown on 1able 1 below perorms a linear log-linear regression analysis by irst
regressing judicial and intelligence ineectieness ,LOG JUDIN1S\SIN,, lack
o international judicial cooperation ,LOG IN1 COOP,, asset oreiture leels
,LOG CONlISC,, and lack o preentie programs ,LOG PRLVLN1ION,


against high-leel corruption ,LOG lICORRUP1, while later using the
adjusted coeicients o the irst regression to obtain the adjusted coeicients
regression or organized crime ,LOGORGCRIML,.

TABLE 1
Dep. ariable: LOGORGCRIML - N: 10 Multiple R: 0.92
Adjusted squared multiple R: 0.943 Standard error o estimate: 12.666
Effect Coefficient Std Error Std Coef Tolerance t P(2T)
LOG PREVENTION -1.793 0.388 -0.215 0.250 -4.625 0.000
LOG INTCOOP -2.022 0.313 -0.252 0.354 -6.470 0.000
LOG HICORRUPT 0.457 0.082 0.262 0.245 5.592 0.000
LOG CONFISC -0.799 0.135 0.331 0.173 -5.937 0.000
LOGJUDINTSYSIN 2.319 0.471 0.173 0.436 4.918 0.000

Analysis of Variance
22

Source Sum-of-Squares df Mean-Square F-ratio P
Regression 282003.409 5 56400.682 351.580 0.000
Residual 16202.503 101 160.421

All explanatory ariables explained aboe are signiicant at the 1 percent leels.
1he positie sign shown by the judicial and intelligence systems ineectieness
coeicient ,LOG JUDIN1S\SIN, is as expected and signiicant at the 1 percent
leel. In this case, a 1 percent improement in judicial and intelligence system
coordination,specialization will reduce on aerage organized crime leels by
2.319 percent. On the preention side, a 1 percent increase in the number o
preention programs addressing youth at risk and technical assistance to the
priate sector ,e.g., banks,, show a reduction o organized crime leels equal by
1.93 percent. As expected, high leel corruption is positiely linked to higher
organized crime where a 1 percent decrease in the high-leel corruption indicator
will reduce organized crime by 0.45 percent. On the asset oreitures dimension,
a 10 percent increase in oreitures o criminal assets is linked with an .99
percent reduction in organized crime leels. linally, one o the most impressie
results shows that 10 percent increases in the requencies o international judicial
cooperation are linked with 20.22 percent decrease in organized crime leels. In

22
A separate time-series analysis reeals a Durbin-\atson D statistic equal to 2.023 and lirst
Order Autocorrelation that amounts to -0.058.


short, better implementation-related compliance with the articles o the Palermo
Conention mentioned aboe explain 94 percent o the improing ariations that
we obsere in organized crime leels within the data base o 10 national
jurisdictions. Results also show that countries that are able to implement ,and not
just enact, the deterrence and preentie measures instilled within the Palermo
Conention hae been experiencing signiicant reductions in the growth o
organized crime groups.
1he empirical analysis show that a paradox o criminal dissuasion emerges
requiring the adjustment o Becker`s ,1968, ramework when applied to organized
crime. As a result o the jurimetrics-based analysis presented in this study, just
relying on traditional legal sanctions to counteract organized crime ,e.g.,
increased incarceration and,or extradition o physical persons, will tend to create
an incentie or criminal groups, by using their ast resources, to expand their
corruption rings ,in order to protect themseles rom higher expected sanctions,
thus increasing the eudalization o the state by criminal groups while enhancing
their operational capacities. 1his unwanted result o applying traditional criminal
sanctions will occur i the network o criminal assets ,net worth in the hands o
licit and illicit businesses linked to organized crime, is not hampered by
intelligence and judicial authorities. 1he jurimetrics-based results in 10 countries
show that, in the absence o an actie inancial intelligence-based criminal assets
oreiture program, high-leel corruption grows rapidly while, paradoxically,
public sectors continue to deote more criminal justice system resources to
incarcerating increasing numbers o organized crime members. At the same time,
empirical analysis shows that higher probabilities o sanctions combined with
stier sentencing guidelines in the books against organized crime members do
not play their dissuasie role in the absence o preentie programs to reduce the
low o youth to criminal groups. 1his constitutes the paradox o criminal
sanctions where more requent and stier punishments applied to physical
persons lead to higher leels o organized crime and higher leel corruption.
Among the countries experiencing signiicant reductions in organized crime
since 2002, Colombia and Jordan stand out. 1he main areas o reorms, where
criminal case iles were sampled, show that improing Palermo Conention-
compatible measures included:
;a) An improed, uniorm and comprehensie case management system
coupled with transparent and consistent rules or the assignment o cases,
;b) 1he implementation o uniorm and predictable administratie ,i.e.,
personnel- and budget-related, measures ounded on rewards and
penalties drien by perormance-based indicators, with a consequent
clariication o the career paths or judicial and law enorcement oicers,


;c) Speciic reorms o the organizational structure o the justice system. 1his
inoles the introduction o a much-improed inter-institutional
coordination and category-speciic organizational roles or judicial,
prosecutorial and police personnel in order to secure their own internal
unctional independence while enhancing their joint perormance
through the ormation o task orces inoling specialized judges working
hand in hand with special prosecutorial-police units on speciic organized
crime case-iles,
;a) 1he enhancement o the capacity o the judiciary to reiew the
consistency o its own decisions in court rulings by improing the
eectieness o judicial ,appellate-based, reiews but also by allowing or
the monitoring o ciil society-based social control mechanisms working
hand in hand with the media,
;e) Goernance-related improements in the links between the political sphere
and the judiciary in accordance with the preconditions described aboe.
1he relatiely successul experiences within Colombia and Jordan include
monitoring and controlling the progress o cases rom iling to disposition by
ollowing a task-group management approach, with irst instance court judges
and pools o prosecutors-police jointly managing cases with inancial
intelligence oicers suggesting additional lines o inancial,patrimonial
inestigations to the police-prosecutorial task orces. Asset oreiture programs
are actie and working at ull speed with inancial intelligence constantly
lowing to specialized police and well trained prosecutors who can assess the
opening o new lines o inestigation based on intelligence reports. Moreoer,
assignment o cases to dierent management tracks ,i.e., express, standard or
complex tracks based, among other actors, on the quality and quantity o
eidentiary material, can also reduce procedural times and abuse o discretion
in case assignments and rulings. Such a system o proactie management is
supported by computerized case-tracking technologies, which made it possible
to handle case assignment and to deal with judicial oicers` concerns online in
real time. 1echnical personnel and proessional sta deelopment was
thereore aimed at adopting more adanced inormation technologies to
support case management.
On the other hand, a lack o operational coordination among judges,
prosecutors and inancial intelligence oicers is characteristic in countries such
as Aghanistan, Mexico, and Pakistan that are all experiencing greater leels o
organized crime. In these high-organized crime areas, asset oreiture lack
organizational capacity and enough scale ,in relation to organized crime leels,
and high leel corruption is rampant while criminal groups eudalize ,i.e. take


possession, o local goernments at will. It is noteworthy that, according to the
data, Aghanistan, Mxico and Pakistan do not comply with conditions ,b,
through ,e, aboe, and they iolate between 65 and 8 percent o the clauses
established in the Palermo Conention.
In contrast, Colombian and Jordanian systems, that are now requently
implementing asset oreiture and inancial management o criminal assets,
hae been upgraded in order to include the most eectie measures to strike at
the roots o organized crime and high-leel corruption. As an incentie to
achiee greater operational eiciency, law enorcement agencies are allowed to
retain the proceeds o asset oreiture, allocated to sta welare accounts,
health ministries, or spent on organizational improements. ,In Chile,
Colombia, Jordan, and Singapore, or example, an autonomous agency handles
payment o ines and reunds o bail electronically, with payments credited to
the law enorcement departments achieing predetermined leels o
perormance., Preious experience reeals that higher salary leels tend to
attract more qualiied personnel i subject to strict perormance-based
indicators, thus making corrupt practices less likely. \et structural reorms o
the judicial system are needed irst, including strengthening and modernizing
inancial management and budgeting while training and deeloping
administratie sta.
In short, the countries perorming the best legal implementation strategies
within the organized crime domain hae deeloped computerized case
management processes or police, prosecutors and judges, co-deeloping multi-
agency task orce` systems ,or inestigations and prosecutions, and
computerizing court administration. Such reorms hae made internal corruption
and iniltration by organized crime less likely through the introduction o
organizational re-engineering, including the elimination o procedural complexity
and through reductions in the abuse o procedural and substantie judicial
discretion ound in court decisions.
Once again, Aghanistan, Mxico and Pakistan do not comply with the aboe
conditions. In these three countries, the judicial system must be urther trained to
act within task orces and to take on innoatie electronic means or handling
and assessing complex eidence linking many case iles while enacting subsidiary
legislation or better case management and better control o judicial
argumentation by the judicial councils.



4. FINAL REMARKS
Based on the analysis presented in preious sections, the most eectie policy
measures against organized crime linked to high leel public sector corruption
,that irst captures and later eudalizes states, are mainly ounded on our pillars:
,i, the introduction o more eectie judicial decision-making control systems
causing reductions in the requencies o abuses o procedural and substantie
discretion, ,ii, higher requencies o successul judicial conictions based on
eidentiary material proided by inancial intelligence systems aimed at the
systematic coniscation o assets in the hands o criminal groups and under the
control o licit` businesses linked to organized crime, ,iii, the attack against high
leel public sector corruption, and ,i, the operational presence o goernment
and,or non-goernmental preentie programs ,unded by the priate sector
and,or goernments and,or international organizations, addressing technical
assistance to the priate sector, educational opportunities, job training programs
and,or rehabilitation ,health and,or behaioral, o youth linked to organized
crime in high-risk areas ,with high-crime, high unemployment, and high poerty,
in each o the 10 countries sampled or this study.
An empirical jurimetrics model is or the irst time deeloped here or the
aboe three actors. In this context, the success o prosecutions and conictions
against criminal organizations should be measured less by incarceration o
physical persons and should be more ocused on disrupting the production
unction o criminal enterprises through oreitures, thus reducing the amounts
o net worth aimed at expanding public corruption rings used by criminal groups
to eudalize States. At the same time, preentie policies aimed at diminishing the
low o youth into criminal actiities hae already shown their capacity to disrupt
the street-based operational capacities o organized crime.
As stated aboe, a paradox o criminal dissuasion emerges that requires the
adjustment o Becker`s ,1968, ramework when applied to organized crime. As a
result o the jurimetrics-based analysis presented in this study, just relying on
traditional legal sanctions to counteract organized crime ,e.g., increased
incarceration,conictions and,or extradition o physical persons - capos or
otherwise, will tend to create an incentie or criminal groups to expand their
corruption rings ,in order to protect themseles rom higher expected sanctions,
thus increasing the eudalization o the state by criminal groups while enhancing
their operational capacities. 1his unwanted result o applying traditional criminal
sanctions will occur i the network o criminal assets ,net worth in the hands o
licit and illicit businesses, is not hampered by intelligence and judicial authorities
irst. 1he jurimetrics-based results in 10 countries show that, in the absence o
an actie inancial intelligence-based criminal asset oreiture program, high-leel
corruption grows rapidly while, paradoxically, public sectors continue to deote


more criminal justice system resources to incarcerating,conicting increasing
numbers o organized crime members. At the same time, empirical analysis
shows that higher probabilities o sanctions aimed at physical persons combined
with stier sentencing guidelines in the books against organized crime members
do not play their dissuasie role in the absence o preentie programs to reduce
the low o youth to criminal groups. 1his constitutes the paradox o criminal
sanctions where more requent and stier punishments applied to physical
persons lead to higher leels o organized crime and higher leel corruption.
Lidence-based results show that the inter-institutional coordination and the
ield specialization o judicial and intelligence systems are a necessary condition
or successully addressing organized crime. Moreoer, the eectieness o
combining deterrence and preentie measures to counteract organized crime,
as shown aboe, are both necessary to expect reductions in organized crime.
Certainly, it would be quite nae to just think that ratiying and later enacting
Palermo Conention proisions prescribing punitie and preentie measures
alone would be enough to guarantee successes in the ight against crime. 1he
judicial and intelligence systems reorms described in the preious sections,
when applied in best practice countries, required a background o socio-
political consensus that included the legislatie, executie, judicial, and ciil
society domains with actors all willing and able to design, implement, and
support such reorms. 1he gaps between the Palermo Conention-related
domestic laws in the books and the same laws in action will be reduced
wheneer the political will to enact legal reorms coexists with the technical
capacities to implement the aorementioned reorms. lailures to ully
implement much-needed institutional improements hae been mostly due to
the lack o goernmental long-term commitment, political instability, armed
conlicts, and a lack o participatory stakeholders ,i.e., ciil society-based,
experimenting with preentie approaches supporting reorms. 1hese ailures
hae also been characterized by non-committed legal transplants o the
Palermo Conention into domestic legislations in order to appease
international organizations. 1hese lessons rom experience must be taken into
account wheneer public authorities plan their operational strategies and
legislatures design, drat, and enact laws.
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