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International monetary flows of non-declared origin

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Madsen, Frank G 


Through an analysis of the presence and nature of international monetary flows of non-declared origin and their relation to deviant knowledge, the thesis determines that both terrorism and organised crime are nurtured by a constant trickle from minor sources rather than by large financial transfers; and that anti-money laundering provisions are misapplied, taken too far, too expensive, and incapable of demonstrating their effectiveness. In lieu of more traditional policy recommendations, the thesis develops a complexity-theory based intelligence function, capillary intelligence, to improve the present information-gathering systems and generate consistent and context-relevant intelligence for the consideration of policy-makers. The intelligence function takes into account also the concept of self-organised criticality. The thesis fully adheres to the principle that efficiently applied intelligence-led approaches for detection of organised crime are demonstrably superior to a “follow the money” approach. An extended concept of deviant knowledge is developed and five methodological techniques employed: Complexity theory, network theory, self-organised criticality, scaling theory, and intelligence treatment. The thesis is multidisciplinary and calls on contributions from International Law, Economics, Criminal Justice Studies, and Governance and Ethics. Its approach is illustrative and fits Baudrillard’s 1981 methodological principles known as bricolage. Using five methodologies and six major case studies, the thesis reaches four conclusions. First, the rapid expansion in the currency component of the US money supply (M1) has no domestic explanation and can best be explained by an increase in overseas illegal traffics of various sorts. Second, terrorism and major organised crime are, for a large part, nurtured by a constant trickle of funds originating from minor crime, such as, respectively, smuggling of tobacco product and retail fencing, and sale of counterfeit luxury goods. Third, calculation of the cost of the application of anti-money laundering shows these to be cost-inefficient, apart from being highly intrusive. The thesis’ calculations as well as prior literature makes it certain that such provisions, although inefficient, are enforced in a forceful exemplification of the deviant knowledge concept. Fourth, the thesis demonstrates the importance of organised crime in resource depletion and emphasises the nefarious consequences of such criminal behaviour, in particular as regards deforestation, since organised crime can apply the necessary pressure on the local population—in conjunction with extensive corruption of police or military personnel—and provide the managerial expertise to have the trees felled, transported internationally by ship and sold in another country often with false documentation as to the origins of the forest product. In a final case study, the tragic concept of resource curse is considered, in casu the island of Bougainville, PNG.





Money laundering, Intelligence, Smuggling, Overseas use of US dollar notes, Environmental crime


Doctor of Philosophy (PhD)

Awarding Institution

University of Cambridge