For the moment, the fight against organized crime would appear to be at an impasse, hemmed in by the embedded nature of illicit activity in communities and states. In order to begin sketching a more effective and comprehensive set of policies to address the global presence of crime and corruption, and its impact within nations and regions, we must begin by understanding why organized criminal activity has evolved in such a way that is has become entrenched in communities and state systems, particularly in fragile and conflict-affected states; and, on this basis, explain its evolution into a recurrent feature of popular discontent with governments, above all in flawed democracies. In short, it is essential to recognize and account for the systemic presence, real and perceived, of crime and corruption.
At the risk of excessive brevity, the account given below focuses on three processes that complement one another, and to a great extent account for this systemic entrenchment. The first looks to the emerging nature of money in politics, above all in the developing world; the second turns to the evolution in criminal practice, above all within the state; lastly, the third part considers the current global implications.
Official estimates suggest that the income of organized criminal groups has grown exponentially over the past two to three decades. Criminal syndicates participate in activities whose income streams have been greatly enhanced by global trade, transport and communications: these include drug trafficking, human trafficking, wildlife trade and illicit extraction of natural resources. While rarely operating at the transnational scale, extortion and kidnapping have also reportedly grown in magnitude.
According to the United Nations Office on Drugs and Crime (UNODC), in 2009 the total income of transnational organised crime amounted to $870 billion – an amount equal to 1.5 per cent of global GDP.  Although this figure is contested by a number of experts, some of whom argue that that crime as a proportion of global GDP may in fact have fallen,  the rise of high-value criminal activities and the diversification of markets – particularly cocaine, amphetamine-type substances and human trafficking – suggests that global criminal revenue has increased significantly, both in gross terms and as a share of the world economy. For instance, in 2014, Giovanni Brauzzi, security policy director of the Italian Ministry of Foreign Affairs, declared that, with an annual income in excess of €200 billion, the combined turnover of all the country’s mafia groups had exceeded that of the entire yearly EU budget. 
At the same time as criminal revenues have risen, particularly in certain countries and regions that have been heavily exposed to illicit trafficking, the role of private money in public life has assumed greater prominence across the globe. This development is driven by, on the one hand, the increasing competitiveness of elections and, on the other, the weak enforcement, or lack of, campaign finance rules.  Particularly in Latin American countries, elections are more fiercely contested than ever: opposition candidates won more than half the presidential elections in 18 Latin American countries between 2000 and 2010.  While trying to win votes in these tight races, often without traditional party structures or popular loyalties to rely on, candidates are liable to spend increasing amounts of money on their campaigns. For instance, in Panama the 2009 campaign of former president Ricardo Martinelli amounted to more than US$18 million, an extraordinary amount for a country with just over two million voters.  Furthermore, an inspection of political finance legislation in Latin American countries shows that, owing to weak checks and balances, campaign and party finance rules are rarely enforced. 
It is important to note that the influence of private money in politics is not merely a feature of developing countries. In fact, the United States is currently one of the countries with the fewest restrictions on private donations to political parties or candidates.  A recent report by the intergovernmental organization International IDEA found that most of the world’s countries apply no quantitative limits at all to private donations to political actors.  In these settings, the risk that both corporate and criminal revenues find their way into political life is considerable – above all in fragile state. According to one recent multi-country study, investing in politics is a logical step for a criminal industry that, to thrive economically and take advantage of global facilities for trade and finance, requires pliable law enforcement and a measure of selective control over public institutions. 
Lastly, while criminal revenues and private influence over politics have simultaneously grown, traditional structures of political and social authority have undergone a sustained loss in legitimacy. The mass public protests of recent years reflect precisely this uncertainty as to the nature of state legitimacy and authentic democratic representation in an era marked by financial crisis, subsequent austerity measures, the evident failures of the neoliberal model in numerous countries and a rise in global inequality.
At the same time, the revolution in technology and rise of social media have generated increased transparency in public affairs, and a public constituency that is far better informed as to elite wrongdoing, and to the possibilities for creating horizontal networks of protest and activism in response.  These circumstances have generated greater possibilities for collective action, at the same time as economic reality dictates that prospects for a more prosperous, mobile future are grim (especially for unemployed youth in the Global South).  The combination has contributed to a general erosion of public trust in traditional institutions.
These various dynamics have had two contrasting yet complementary effects on criminal activity connected to states. On the one hand, criminal organizations have come to occupy the interstices of states that have suffered acute institutional fragmentation, tolerate high levels of social exclusion and are largely bereft of popular consent. This appears to have been the case in countries as diverse as Guinea-Bissau, Guatemala and post-conflict Libya. On the other hand, and above all in middle-income democracies, the widespread perception of criminal collusion with actors in the state has become a very effective, highly tangible means to account for and mobilize against what is perceived to be the exploitative use of public authority by private actors. Even in Europe, one recent survey shows that citizens have low levels of trust in government, and even lower levels of trust in political parties; they fear that some parties and candidates, once in office, will use corruption to place the interests of particular groups of donors before that of the public.  According to the analyst Moisés Naím, the threat to the old ‘mega powers’ posed by smaller groups of disaffected and alienated social actors can lead to a generalized breakdown of state authority. 
In short, while illicit activity is playing a greater role in shaping political life by taking advantage of weak controls on private financing of politics or by stepping into the institutional fragmentation and vacuums generated in certain weak state environments, this criminal presence also serves as a source of collective discontent and mass mobilization. While such mobilization could bring about far-reaching benefits to the probity and integrity of public life, as may occur in Latin America,  it is also able to endanger basic political stability; or in the case of Ukraine or Mali, international security as a whole. 
Not only has the income of organized crime undergone a major boost over the past two decades; the make-up of criminal organization has also been transformed. Organized crime is no longer a sphere of nationally confined mafia groups and gangs. The post-1990 boom of transnational trafficking networks has instead led to an expansion of criminal networks across borders, and to a mutation in criminal practice.
Corruption has been the necessary condition for the expansion of criminal networks within states and across state borders, ensuring a permissive or even cooperative response from law enforcement, judicial and political actors to illicit activity. Blocs of corrupt elites are especially powerful in many developing countries because, as Mushtaq Khan has argued, processes of economic transformation involve the creation and entrenchment of new elite groups. As the state often plays an important role in the economy in such countries, it will tend to support this process and assuage the prospective losers through the use of increased distribution of rents and material privileges.  Because corruption is seen as ‘smoothing’ political and economic transitions in fragile political orders, some authors argue that it can actually be an instrument to assure peaceful economic growth. 
Yet the human costs of such arrangements in an era of advanced globalization may outweigh the apparent benefits of what is, in fact, a very fragile peace.  For instance, earlier this year the UN Secretary-General underlined the negative effects of corruption on development through misuse of public funds, reduction in public trust, and the weakening of the rule of law.  Furthermore, corruption has become the main portal through which organized criminal groups have associated with an array of state and security officials in the construction of illicit networks. By engaging numerous different sectors and officials on an opportunistic basis, these networks tend to avoid the sort of exposure to law enforcement that permanent, organized criminal activity entails. As a result, they have become the outstanding vehicle for criminal activity attached to the state, ready to emerge and dissolve as circumstance dictates.
The range of officials that can be involved, as well as the public powers which they may cede or sell for illicit purposes, offers huge possibilities for innovation, expansion and diversification, while dampening the risk that the entire criminal enterprise be dismantled. “Starting at the lower levels, police exchange their powers against bribes, and low-level bureaucrats offer services only in exchange for payment and favors,” argues Susanne Karstedt. “At the highest level, government officials abuse their positions of power in issuing government contracts, and they are in a position to influence prosecutions and courts thus curbing the independence of the judiciary.” 
Fragile and conflict-affected states are places where the variable geometries of illicit networks flourish. In Libya, alliances between armed groups, backed by political coalitions, and criminal networks are undermining efforts to establish a national unity government.  Likewise, in Guinea-Bissau, state and military officials have become heavily involved in corrupt and criminal activities.  While conflict-affected states are usually connected to the global economy in multiple ways, their governments and institutions are often too weak to control the entire national territory or the numerous branches of the state and its security forces. Owing to the limited openings for legitimate commercial activities, “criminal groups can make use of these opportunities to make money… usually those who already have money and power and who are in a good position to spot the opportunities”.  In this context, it is not simply that organized crime ‘infiltrates’ or ‘infects’ politics, but rather that corrupt private sector and political actors are themselves willing accomplices in the facilitation of illicit activity for profit-making.
To understand how such illicit networks now operate and have expanded, it is instructive to take the example of Paulo Maluf, a Brazilian congressman and former governor and mayor of São Paolo. Maluf is a key political figure in the country, and has the dubious reputation of having a verb named after him: malufar, meaning ‘to steal public money’. He is known for inflating the price of construction contracts, thereby making a fortune in bribes and kickbacks. In one notorious case, a highway went over budget by US$400 million, of which US$11.6 million was reportedly garnered by Maluf, according to documents published by the World Bank and the United Nations Office on Drugs and Crime. 
He was able to carry out his schemes by controlling a bank account in New York, opened by a shadow intermediary, which processed US$140 million dollars in two years. The cash moved from Manhattan’s 5th Avenue to the British Channel Island of Jersey while registered under secret shell companies owned by Maluf and his son. At least some of this money was then repatriated back to Brazil through the black market to fund Maluf’s political campaigns.  Even though Interpol has issued an international warrant for his arrest,  he continues to serve in Congress. The recent indictment of 22 members of his Partida Progresista (PP) party  in the Petrobras scandal - the biggest corruption scandal in Brazilian history  – indicates that Maluf’s criminal behaviour has become part of a larger practice of graft.
The case of Maluf also sheds lights on the way criminal practice has evolved to the detriment of legitimate public governance. Many recent cases of mass public discontent have hinged not on everyday corruption and bribery, but on high-level or ‘new corruption’,  involving both legal and illegal actors. Crime in these cases manifests itself as a fusion of state and private actors in complex, opaque financial arrangements, where the apparatus of law and state power both disguises and facilitates a joint criminal enterprise. Moreover, when these arrangements are linked to a global financial system characterized by secrecy and complexity, illicit transnational networks emerge, in which it is hard to distinguish the legal from the illegal in a host of cross-border operations.
Shadow intermediaries or brokers play a pivotal role in forging these national and international partnerships, and are reputed to have become the best-remunerated and most important players in much organized criminal activity.  Lawyers, for instance, often play a lead role as intermediaries between criminal and legal entities. According to one comprehensive Dutch analysis of recent organized crime trends, other key shadow facilitators include financial specialists, notaries, airport personnel, and corrupt civil servants.  The 2014 OECD Foreign Bribery Report shows that three out of four foreign bribery cases involve payments through such – technically legal – actors.  Transnational illicit networks involving a range of brokers, financiers and front companies can also play a significant part in the direct funding of armed conflicts. For instance, traders, border officials, refiners and transport companies in Iraq and its neighbouring countries, conjoined in a pre-existing network of informal oil refining and trafficking, have made it possible for the so-called Islamic State to earn millions of dollars from captured oilfields. 
Global Financial Integrity reports that US$991.2 billion flowed illicitly out of developing countries in 2012, a sum greater than the combined total of foreign direct investment (FDI) and net official development assistance (ODA) received by those economies in the same year.  China, Russia, Mexico and India top the list of countries with the highest annual illicit outflows in 2012, although it should be noted that fragile or conflict-affected states such as Iraq, Syria and Nigeria were also heavily exposed to these financial movements. 
The international policy debate on corruption, driven by organizations such as the World Bank, Transparency International and the OECD, has tended to focus mostly on petty corruption, or what some scholars refer to as ‘need corruption’, referring to the everyday corruption that citizens have to deal with when trying to access basic goods and public services. In their foreign policy designs for developing countries, donor governments are also inclined to focus mostly on how to address corruption in the public sector. 
However, whether the origins of money are commercial, corrupt or criminal, and whether the sources of the latter are tax evasion, stolen public funds, or money laundering from drug trafficking, global money now tends to flow through the same international financial institutions, blurring the lines between licit and illicit.  Often they pass through so-called ‘tax havens’ and secrecy jurisdictions such as Panama or the British Virgin Islands, but also Switzerland, Luxembourg, Germany, the USA, Hong Kong, Japan and Singapore.  According to the Tax Justice Network, “a global industry has developed involving the world’s biggest banks, law practices and accounting firms which not only provide secretive offshore structures to their tax- and law-dodging clients, but aggressively market them”. 
An illustration of these trends can be found in the recent leak of HSBC files, which revealed that the Swiss subsidiary of this bank concealed large sums of money for people facing serious allegations of illegal activity, including cocaine smuggling, blood-diamond trading, money laundering and corruption. Much of this money originated in countries severely affected by armed conflict or criminal violence, including Nigeria, Angola, Ukraine and Mexico; in the case of the latter, the bank has admitted wrongdoing in laundering $881 million in money for Mexican drug cartels.  This kind of facilitation has been made possible by bank secrecy norms, and the fact that financial institutions can claim to be unaware of the illicit origin of their funds since most money enters through semi-legitimizing intermediaries working beyond the borders of the original crime.
Banking laws and secrecy jurisdictions have recently come under increased scrutiny as a result of such scandals. In response to such criticism, the G-20 summit in late 2014 gave fresh political impetus to this issue by backing a transparency drive aimed at curbing the use of anonymous shell companies and trusts.  However, it remains the case that the global financial system is porous to flows of money whose illicit origins often go undetected, whether through design or omission.
Furthermore, a number of cases and incidents suggest that similar practices may have spread to actors and organizations operating as informal institutions of global governance, often serving as intermediaries between states, individual government officials and private business interests. As mentioned earlier, FIFA has gained notoriety as an example of a global governing body whose informal regulations and multiple stakeholders have made it allegedly complicit in corruption. The lawyer who was in charge of investigating corruption during the bidding process for the 2018 and 2022 World Cups, Michael Garcia, quit, citing a “lack of leadership” within FIFA to become more transparent in its behaviour.  Given the existing illicit connections to the financial system, it is a matter of concern that opaque and informal political–business linkages operating on a transnational scale are at risk of facilitating ever more complex corruption networks.