The structure of the illegal economy and its relationship to money laundering

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Abstract

Money laundering in the illegal economy is a big global concern; consequently, numerous international regulations have been adopted to prevent the issue (United Nations Office on Drugs and Crime [UNODC], 2009). This research describes the structure of the illegal economy in Thailand and the relationship between money laundering and the three forms of the illegal economy (drugs, gambling, and corruption). Those who participated in three activities were interviewed in-depth, and then the results were analyzed using theoretical analysis and constant comparison analysis. The results indicate that strong demand and supply within Thailand and along its borders have created a substantial black market in the country, and money laundering arises through several avenues. The structural relationship of Thailand’s extralegal economy is a result of the imperfection of the official economy and the degree to which the state market mechanism is intervened with various measures. Due to the complexity of the illegal economy, a large number of agencies are involved, resulting in an information system that cannot be categorized as including atypical transactions. Therefore, it is a big difficulty and a hindrance to swiftly assembling the complete litigation. This report offers the government and legal sectors with advice for combating illegal economies.

Keywords: Illegal Economy, Drug, Gambling, Corruption, Thailand

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

Acknowledgements: The Author acknowledges the Office of the National Anti-Corruption Commission, the Office of the Narcotics Control Board, the Ministry of Justice, the Ministry of Interior, the Department of Special Investigation, the Research Institute of Rangsit University, the Ministry of Finance, the Securities Exchange Commission, the Bank of Thailand and the Office of the National Counter Corruption Commission, including bordering provinces as well as academic and non-governmental network partners. The Author is grateful for advice from Prof. Pasuk Phongpaichit, Ph.D. (Faculty of Economics, Chulalongkorn University), Ass. Prof. Sungsidh Piriyarangsan (Chairman of the Senatorial Commission on Poverty and Disparity Eradication), Ass. Prof. Nualnoi Treerat, Ph.D. (Director of Institute of Asian Studies of Chulalongkorn University), Dr. Mano Laohavanich (Honorary Advisor to the Commission for Poverty Eradication and Inequality Reduction of the Senate of Thailand). The Author would like to thank Itsaree Phaksipaeng, Ph.D., for support in data collection and research assistance.

JEL Classification: K4

Received: 24.02.2022
Accepted: 23.05.2022
Published online: 26.05.2022

How to cite this paper: Sonsuphap, R. (2022). The structure of the illegal economy and its relationship to money laundering. Corporate & Business Strategy Review, 3(1), 45–54. https://doi.org/10.22495/cbsrv3i1art5