PNAS 123/33 pp. e2512080123-e2512080123 2026-08-10 Original The money laundering market: An economic analysis
Joras Ferwerda
Abstract
Criminals launder their proceeds from crime, either themselves or by paying a professional, to disguise the link between the criminal, the crime, and the proceeds. This allows the criminal to spend the proceeds more freely and lowers the chance of receiving unwanted attention from the authorities. This paper investigates the structure and dynamics of the understudied market for money laundering services. The analysis reveals that this illegal market is demand-driven and fragmented, with different forms of laundering, each requiring different steps with varying levels of risk. High search costs, specialized money launderers, and uncertainties lead to local monopolies. Demand tends to be relatively inelastic because criminals eventually need laundering services to spend their proceeds. Local monopolies, inelastic demand, and poor information flows lead to relatively high prices for laundering. Trust issues and two-sided asymmetric information lead to a market with relationships that tend to last longer than generally expected in illegal markets.
PNAS 123/33 pp. e2511019122-e2511019122 2026-08-10 Original The market for human smuggling: Structure, mechanisms, and paradoxes
Paolo Campana
Abstract
Human smuggling is the facilitation of unlawful cross-border movement. It is primarily a commercial activity, offered as a service to willing, paying customers, and a large-scale market catering to millions seeking to circumvent mobility restrictions. Contrary to prevailing media and political narratives that depict smuggling as dominated by powerful and highly sophisticated criminal organizations, this study documents a fragmented, decentralized market composed of independent, localized actors operating through flexible, often temporary networks. These flexible arrangements, coupled with low barriers to entry, confer resilience and adaptability to the market, making enforcement difficult and resource-intensive. Intensified enforcement often produces unintended consequences, including heightened migrant vulnerability and increased reliance on smugglers. Despite regional differences, smuggling operations exhibit striking structural similarities shaped by local knowledge and monitoring costs. Such enduring structural characteristics exist alongside a growing role played by communication technologies, which are reshaping dynamics between service providers and customers. Ultimately, human smuggling remains a market fraught with paradoxes: Migrants face severe risks yet view smugglers as essential facilitators, while states confront the complex task of balancing border enforcement with humanitarian obligations and protections of vulnerable individuals.