To assume that the weakness of state institutions correlates with the economic performance of the state is too simplistic. The strong relationships that exist between the measures of governance and economic growth or performance do not necessarily imply that a strong economy is followed by a high quality of institutions. In fact, it seems more plausible that good governance with highly independent law enforcement agencies does not require expenditures only affordable by rich countries with vast resources, but is rather dependent on sound legislation and political will” On theoretical grounds, the relationship between favourable socio-economic conditions for TOC is a more indirect one, following the logic that weak institutions lead to less wealth and poorer societies that provide good breeding grounds for TOC activities. Those activities may reach an extent where they re-impact the legal economy and state institutions resulting in a vicious circle the dynamics of which are further explained below in section 3.5.1 of this chapter, ‘Economic impacts’.
However, poverty often goes hand-in-hand with political instability and both constitute an important force driving the flourishing of TOC. In fragile states, such as some parts of northern Africa, power and investment vacuums in the public and private sector are likely to be filled by TOC, particularly through providing essential goods and services such as transport infrastructure, food, and fuel.       Thanks to the global economic crisis, however, not only African states are suffering from a high rate of unemployment, especially among young people. In nearly all parts of the world, poverty and unemployment provide a nearly unlimited recruiting pool of foot soldiers for illicit organisations^1 The absence of opportunities and participation in the labour market has a strong effect on human trafficking of labourers and on sexual exploitation, as unemployment is a significant push-factor. Victimization of both kinds becomes more likely for (young) people living in insecure economic circumstances.62
We have already mentioned how TOC may generate benefits and positive impacts for society by employing people or reinvesting money derived from their illicit activities. However, the real problem with the profits of TOC is that they are mainly funnelled to transnational crime syndicates where they are used to maintain or establish new trade networks, while the labour force at the base of such syndicates only receives a minor part of the profits made from the trade. The coca farmer from Peru, the organ donor from Pakistan, or the prostitute from Bulgaria only receive a tiny fraction of the retail earnings of their contribution^3
Among scholars of TOC there is broad consensus that the economic liberalization that goes hand-in-hand with globalization has been a factor facilitating the evolution and expansion of criminal organisations^4 As a consequence, the absence of effective regulatory oversight and the establishment of offshore financial centres made money laundering easier.65 The increasing desire for mobility paralleled by the hardening of border protection and tightening of immigration laws created a new variety of opportunities for human traffickers. More generally expressed: the global economy has created socio-economic inequalities around the world as well as an extensive mobility of goods and people that, in turn, has created circumstances described as ‘criminogenic asymmetries’, offering a variety of opportunities to criminal organisations while complicating regulation by states.66
-  Europol, EU Organised Crime Threat Assessment, OCTA 2011, The Hague, Europol Police Office,2011, p. 49.
-  Antonio Maria Costa, ‘The economics of crime: a discipline to be invented and a Nobel Prize to beawarded’, (2010) Journal of Policy Modeling, 660.
-  Maihold, ‘Der Mensch als Ware’, cited in note 37 above, p. 9.
-  Jeremy Haken, Transnational Crime in the Developing World, Washington DC, Center forInternational Policy, 2011.
-  See Tim Hall, ‘Economic geography and organized crime: a critical review’, (2010) Geoforum (41),841-5, p. 842.
-  Tim Hall, ‘Geographies of the illicit: globalization and organized crime’, (2013) 37 Progress inHuman Geography (3), 366-85, p. 371.
-  Hall, ‘Economic geography and organized crime’, cited in note 64 above, p. 842.