Sounds like if you could cheaply get rid of anti-money-laundering laws, this would be pretty effective altruism: > Necessarily applying a broad brush, the current anti-money laundering policy prescription helps authorities intercept about $3 billion of an estimated $3 trillion in criminal funds generated annually (0.1 percent success rate), and costs banks and other businesses more than $300 billion in compliance costs, more than a hundred times the amounts recovered from criminals. Found at this Marginal Revolution post.
Seems plausible. Presumably if some crime is deterred by these rules, which would leave the $3bn an under-estimate of the benefit. On the other hand, without the rules we might see more innovation in financial services, which would suggest the $300bn an under-estimate of the costs.
Unfortunately I think it is very unlikely we could make any progress in this regard, as governments do not like giving up power, and the proximate victims are not viewed sympathetically, even if the true incidence of the costs is broad.
There have been attempts in the past to reform, as they particular harm poor immigrants trying to send cash home, but as far as I am aware these attempts have been almost entirely unsuccessful.
Poaching, murder, terrorism, and sex trafficking all cause more than just financial harm, although I don’t know what portion of the crime prevented by AML laws is these things. Authoritarian states like the PRC, which has been systematically oppressing Muslims and Tibetans, participate in money laundering, too. Decriminalization of drugs and sex work would reduce the amount of illicit drug and sex trafficking, since legal producers would outcompete the criminal organizations, while growing the economy.
Sounds like if you could cheaply get rid of anti-money-laundering laws, this would be pretty effective altruism:
> Necessarily applying a broad brush, the current anti-money laundering policy prescription helps authorities intercept about $3 billion of an estimated $3 trillion in criminal funds generated annually (0.1 percent success rate), and costs banks and other businesses more than $300 billion in compliance costs, more than a hundred times the amounts recovered from criminals.
Found at this Marginal Revolution post.
Seems plausible. Presumably if some crime is deterred by these rules, which would leave the $3bn an under-estimate of the benefit. On the other hand, without the rules we might see more innovation in financial services, which would suggest the $300bn an under-estimate of the costs.
Unfortunately I think it is very unlikely we could make any progress in this regard, as governments do not like giving up power, and the proximate victims are not viewed sympathetically, even if the true incidence of the costs is broad.
There have been attempts in the past to reform, as they particular harm poor immigrants trying to send cash home, but as far as I am aware these attempts have been almost entirely unsuccessful.
I’d imagine that the crime deterred can’t be too much more than $3bn worth—altho perhaps if you steal $x, the social cost is much larger than $x.
Poaching, murder, terrorism, and sex trafficking all cause more than just financial harm, although I don’t know what portion of the crime prevented by AML laws is these things. Authoritarian states like the PRC, which has been systematically oppressing Muslims and Tibetans, participate in money laundering, too. Decriminalization of drugs and sex work would reduce the amount of illicit drug and sex trafficking, since legal producers would outcompete the criminal organizations, while growing the economy.