The Tortuga disease: the perverse effects of illicit foreign capital
| Autor: | Steven Oliver, Justin V. Hastings, Ryan S. Jablonski |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2017 |
| Předmět: |
Dutch disease
HG Finance Sociology and Political Science media_common.quotation_subject 05 social sciences HC Economic History and Conditions International economics Local currency Payment Somali language.human_language 0506 political science Ransom Politics Economy Capital (economics) 0502 economics and business Political Science and International Relations 050602 political science & public administration language Economics 050207 economics Commodity (Marxism) media_common |
| Popis: | Transnational crime brings substantial foreign capital into a number of fragile and developing states. Yet the economic and political impacts of such capital have rarely been studied due to the challenges of obtaining accurate data on illicit activities. We overcome this challenge by compiling a dataset on the amount and disbursement dates of ransom payments made by ship owners and insurers to Somali pirates from 2005 to 2012, along with sub-national commodity prices and trade flows in Somalia. Using a difference-in-differences strategy, we hypothesize and find that ransoms have effects similar to those associated with the Dutch Disease. These effects include appreciating the local currency, decreasing export competitiveness, and increasing import dependence. The results illuminate a new channel through which illicit capital can undermine long-term economic development and foster an economic and political dependency on illicit sectors. |
| Databáze: | OpenAIRE |
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