Economic Analysis On Organized Crime

Since China carried out reforming and opening-up policy in 1978, Organized crime rate has been increasing dramatically. People’s sense of insecurity began to spread among the whole society. By the end of 2007, Organized crime rate had been more than ten times of the 1978’s, which was very rarely in the world. The side-effects of increasing Organized crime rate had extended too many aspects: a negative impact on the economy, the country’s criminal justice expenditures are overburdened, and the happiness of demos is reduced. People’s happiness index also decreased. All these are deeply worried the government. Various areas of research scholars have also discussed the reasons for this phenomenon; however, more ordinary people regarded it as the byproduct of economy increasing for those years. Nowadays, people have not yet reached a consensus about the basic causes of Organized crime and methods of treatment. Against this background, this thesis tries to study the primary mechanisms of Organized crime and the corresponding criminal justice measures.Different from past researches, this thesis investigates on the Organized crime in a view of economics. All the theories and methods used in the thesis are originally from the economics of Organized crime. As a new branch of applied economics, the economics of Organized crime has made great progress in both theory and empirical analysis during the past forty years abroad. However, no researches have been systematically carried out on it in China. The reason for this gap is the special difficulty and the high qualifications. It required one who should be skilled in economics theory and technique, be proficient in criminology, be familiar with criminal law, be good at basic knowledge of sociology and psychology, and be acquainted with criminal justice practices. It is especially hard to qualify with all these requirements. Fortunately, I work in the public security system for over 10 years, more familiar with the organized economic crimes. With almost three years’ endeavor, I had prepared well for the research on economics of Organized crime. Therefore here in this paper, I boldly try to make an analysis on the Organized crime in the view of economics.The thesis is organized strictly with the logic of economics analysis. Firstly, it analyzes why individual commits Organized crime in the view of microeconomics. Then, it investigates what factors bring on Organized crime in the view of macroeconomics. After making out why there exists Organized crime, it begins to analyze how to prevent and control Organized crimes and how to punish criminals in succession. The aim of these measures is to attain the economic optimization, which is trying to use the least resource to minimize the damage of Organized crimes in the whole country. Also, the core ideal that integrated each chapter is the economic optimization. That is, while the criminal tries to maximize his Organized crime benefit, the ordinary people (potential victim) try to seek the optimal defend and minimize the loss to Organized crime, and the Organized crime justice system tries to minimize the social costs of Organized crime under constrains of fixed resources and funds.In order to make a profound analysis, the thesis adopts all kinds of economics models such as cost-benefit model, time-allocation model, econometrics model and public-choice model. So, except for the introduction, each chapter is designed with at least one economics model. All those models are linked with each other and form a tight system. Meanwhile, a great deal of knowledge of criminology, sociology and law is also adopted in the thesis to supplement the deficiency of economics analysis.The main framework of the thesis is arranged as follows: The chapter 1 summarizes the development history of the economics of Organized crime abroad and proposed the research content, methods, ideas, and so on. The main content of chapter 2 analyzes individual reasons of Organized crime. After expatiating on rational Organized crime, I emulate all costs of Organized crime and benefits of Organized crime. Then I put forward the proceeds of organized crime and economic costs of the constitution, the establishment of the crime of cost-benefit model, time allocation model, the rational analysis model and dynamic game model. The four models are the commander of the whole paper. The most important task of the chapter 3 is to analyze macroeconomic factors that induce Organized crime. Based on the four models of chapter two, I select some factors to construct the econometrics model. The empirical analysis of the econometrics model shows that the increasing Organized crime rate in China these years is due to the gap between rich and poverty which is becoming larger and larger, while economy increasing has no direct connection with it. In chapter 4, the author constructed the optimal model of organized economic crime prevention of the potential victims of crime, and gives specific countermeasures for the prevention of organized economic crimes from increasing the organized economic crimes’ costs; lower income of organized economic crimes, increased risk of organized economic crimes and so on. The chapter 5 puts forward the optimal Organized crime control rules from the national criminal justice expenditures optimization However, the chief of Organized crime justice system often acts according to the principle of public-choice model rather than optimal model.The thesis is the systematical summarization of my research on the economics of Organized crime for three years, so it is full of my innovation and imbues with my love. Some of original opinions are listed here:(1) Committing Organized crime is absolutely a rational action that based on criminal’s decision of cost-benefit analysis.(2) For the Organized crime justice policy makers, the key object is to maintain the optimal social Organized crime rate rather than to reduce it at all time.As an integrated discipline, the economic crime has created a lot of fresh point of view. Limited by the requirement of PhDs thesis, I analyses the common conception of "Organized crime" with economics model only and not relate to specific kinds of Organized crime, which constitutes the deficiency of the thesis. On the other hand, collecting data on Organized crime and Organized crime justice is fabulously difficult. So, lots of conclusion in the thesis that educed out of theory model can not be tested by empirical analysis, which constitutes another deficiency of the thesis. Although some suggestions that the thesis deduced from theory analysis are significant to the practices of Organized crime justice, they can not be put to use directly. All these deficiencies are posed further research area for me after I get my PhDs degree. The author is also gratifying that he still work within the system and will have sufficient time and opportunities work for the next phase of research.