M.Comm. / Economists usually distinguish between five macroeconomic objectives, namely, high and sustainable economic growth, full employment, price stability, balance of payments stability and the equitable distribution of income. This research deals with the economics of organised crime. It aims to examine the relationship between organised crime and the five macroeconomic objectives. To prove that organised crime has an impact on macroeconomic stability, it is necessary to show that it involves large sums of money relative to overall economic activity. Crime has always been mentioned as a factor that has an impact on the economic growth of a country, but the extent to which crime constrains growth and by what mechanisms it limits growth and development is unknown. This can be attributed to the underground nature of most organised criminal activities, such as money laundering. Very little research has been done on the costs and the extent of organised crime on the macroeconomy of South Africa. In attempting to quantify the costs of crime relative to the macroeconomy of South Africa, this research identifies various organised criminal activities. It examines the extent of the costs and the threats they pose to the macroeconomic stability of South Africa. This research shows that the political transformation and the resultant globalisation of South Africa during the early 1990s provided an ideal opportunity for organised crime structures to expand. It also shows that organised crime imposes direct and indirect costs on households and businesses, and therefore on the economy of South Africa as a whole. Organised crime diverts funds that could otherwise be invested in productive capacity, it discourages foreign investment and induces the government to spend money on law enforcement, crime prevention and the administration of justice, instead of spending it on the creation of additional employment opportunities. Tax revenue is also lost to money laundering. The abuse of the informal economy by money launderers has an impact on growth. Crime has prevented the growth of the tourist industry to its full potential given the countrys reputation of violence. A loss of skilled personnel who left the country has also been experienced, citing crime as a reason to immigrate.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:6943 |
| Date | 26 October 2010 |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
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