Abstract

ROCHA GARCIA, Ricardo. Drug trafficking wealth, and inequality of income in Colombia, 1976-2012. Rev. Crim. [online]. 2014, vol.56, n.2, pp.273-290. ISSN 1794-3108.

In an intent to understand the economic significance and influence of drug-trafficking on the concentration of income in Colombia, this article estimates the magnitude of the repatriation of drug trade wealth (W) since the mid-1970s by taking into account Repatriable Profits (RP) and their absorption through Hidden Capital Flows (HCF), smuggling, trade practices such as over-billing or under-billing, and foreign investment from tax haven countries. The RPs are accounted for by using production, prices, seizures and confiscations as well as documented assumptions, while in the HCFs official national figures are compared with records of the rest of the world and estimates according to theoretical fundamentals. Thus, W might explain the spike in income inequality, as controlled by economic growth, and would match other manifestations of the deterioration in equity attributed to drug trafficking. Therefore, it implies a nexus of regional importance if we consider that inequality there is associated with economic growth and the confiscations of drug traffickers' assets; and, judging by their inadequate design and ambiguous results, another challenge for public policies aimed at curbing criminally-acquired wealth and promoting lawful economy.

Keywords : Drug-trafficking; hidden capital flows; inequality; money laundering; smuggling; over-billing.

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