Fighting The Shadow Economy:A Case Study Of Usa Policy

This thesis analyzes shadow economy of the United States in general and also discusses important questions such as: what is the issue of shadow economy,circumstances of appearing of shadow economy,ways and means of fighting and countering shadow economy,and also impact of shadow economy not only on national and global economy,but also on national and international security.The thesis consists of four chapters.In chapter one “Defining the issue of shadow economy” first of all the shadow economy is defined and historical moments of formation process of the shadow economy in USA are described,secondly,as shadow economy has a broad definition,it includes several types,which are presented in chapter one.Thirdly,this chapter analyses the circumstances and main causes that lead to the emergence of shadow economy.Without knowing the causes it is almost impossible to tackle the shadow economy.As this thesis is mostly focused on “black” illegal economy case studies and their influence on national and global economics and also on national and international security,at the end of this chapter is presented a case study of the events that occurred on 9/11 and how the USA reacted to it,to trace the measures taken to counter terrorism and terrorism financing as a part of shadow economy.In chapter two “USA domestic and international policies to deal with shadow economy” are traced back government actions during Cold War era,which is divided into two periods: from 1950 to 1970 year and from 1970 to 1991 year,and Post Cold War era till now to see what was done,what policies and actions were adopted on national and international level to fight shadow economy,especially,on fighting terrorism financing,organized crime and money laundering.In chapter three “Case study-Khanani money laundering organization” is presented a case study of money laundering to trace the government policy process and measures to deal with this problem.First of all,in this chapter is defined money laundering and money laundering process step by step,which helps to understand the problem more clearly.“Khanani money laundering organization” is taken as a case study here because,according to US State Department,it is responsible for laundering billions of dollars for organized crime and terrorist outfits.As “Khanani money laundering organization” is based in Pakistan,it is a good example of illicit money movement between Pakistan,the United Arab Emirates(UAE),United States,UK,Canada,and Australia.In chapter three are traced US government actions and measures of taking down “Khanani MLO”,and the results,which will help to understand how USA policy dealing with shadow economy.In chapter four “The evaluation of U.S.policy against shadow economy” I analyzed and reviewed the effectiveness of the USA national and international policies against shadow economy.I divided this chapter into two parts: the first part evaluating the success of the national U.S.government policies,in this part I divided the USA domestic policy against shadow economy into tax system policy and anti-money laundering policy,as the main case study of this thesis is a case study of money laundering organization.In the second part “Evaluating the success of the international U.S.government policies” I reviewed the USA international policies against shadow economy,specifically,international anti-money laundering policy and combating terrorism financing policies.