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Contributions from
the Column
Books and Media
UNEP atlas
Shadow economies
The future of development cooperation
Globalisation, destabilisation and conflicts
07/2005 |
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Shadow economies: Interesting insights
Carolyn Nordstrom:
Shadows of War.
Violence, Power, and International Profiteering
in the Twenty-First Century.
Berkeley, University of California Press 2004, 293 pp., ¤ 16.40, ISBN 0520242416
Undocumented economic activity is a significant element of the international economy. According to estimates, 90 per cent of the Angolan and 40 to 60 per cent of the Russian economy cannot be found in any statistics. In Peru, Italy and Kenya the informal sector is about the same size as the formal. Even in the USA it is 30 per cent. From time to time public interest is aroused by unrecorded flows of certain goods, which because of their illegal or immoral character can well be exploited for scandal. These include illegal drug-dealing, human trafficking, enforced prostitution, gun running, movement of protected species or precious stones. But other less exciting items such as basic food supplies, pharmaceuticals or electronic goods also circulate outside the official economy.
In “Shadows of War” Carolyn Nordstrom, an Associate Professor of Anthropology at the University of Notre Dame, sets her sights on the links between this transnational "economy in the shadows" and the social crises around the edges of globalisation. According to her basic hypothesis, informal economies "are not simply monetary matters, but socio-political power houses". To prove her theory Nordstrom refers to her work on Angola and Mozambique, Sri Lanka and South Africa and to socio-scientific and anthropological approaches. The material presented here allows interesting insights into the functioning and structures of illegal cross-border trade and its corresponding networks of power and control.
The idea that transnational shadow economies function through negotiated rules and laws is basically not new. Mutual trust among the participants inevitably plays a major role here. Their alliances and compromises reflect their own brand of foreign policy. Unlike the development mainstream, however, Nordstrom understands these international trade networks not simply as obstacles along the way to a less violent social organisation and socio-economic balance.
Military equipment and mineral raw materials as well as urgently needed basic food and clothing supplies are moved through the channels of the undocumented economy. The author argues that these are also important structures for social development, because corruption is found mainly in the formal sector. International development cooperation is running the risk of worsening existing conflicts if it continues to focus exclusively on official institutions, when these could themselves be to blame for the crises.
Ruben Eberlein
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