Economic crime in Paraná State, Brazil: a case study

Por Pery Francisco Assis Shikida y Salete Polonia Borilli


The objective of this work consists of an analysis of the economic crime of Paraná State through a case study developed in the Central, Feminine and State Penitentiaries in the city of Piraquara, based on a primary data collected from questionnaires/interviews which were applied to previously judged and condemned defendants for economic crimes. In this research, the hypothesis that the criminals’ migration to illegal activities was in the hope of earning more than the risks of the activity was not rejected. The option for the practice of crime of economic nature is a rational and individual one, with or without the influence of others, in face of the perception of costs and benefits such as those made by individuals in relation to others decisions of economic nature.

Key-words: Economic crimes, Penitentiaries, rational choice.


1 Introduction

The objective of this paper consists of an analysis of economic crime in Paraná by means of a case study of the Central Penitentiaries of Piraquara (CPC), State Penitentiaries of Piraquara (SPP) and Women’s Penitentiaries of Piraquara (WPP), using primary data obtained via the application of questionnaires/interviews given to defendants tried and convicted of economic crimes. The selection of these three prison units was based on the intrinsic characteristics of the penal units, as the previously cited institutions are identified as housing prisoners that require maximum security facilities for their personal protection and for the security of the group. It is worth stating that these are the largest penal facilities constructed by the state government of Paraná, in conjunction with the Ministry of Justice.

Upon analyzing crime under the economic circumstances of its criminal practice one hopes to contribute to the search for a greater understanding of the topic. Its pertinence in relation to the decision to address this issue is still based on recent studies [regarding this, see: Brenner (2001), Schaefer and Shikida (2001), Borilli (2001), Balbinotto Neto (2003), Engel (2003), Fernandez (2003) and Shikida (2005)[3]], that confirm that economic crime is one of society’s most pressing problems.

For Ib Teixeira (2005), in Brazil nearly thirty-seven billion reais are spent every year to protect citizens against crime, and even so, Brazil’s reputation for criminality persists, causing the country to lose lots of money. For example, it is lost in the atrophy of the tourist sector, seriously affected by security issues, although nearly a million people work as guards, almost half of them clandestinely. Equally so, during times of slow growth in the Gross National Product (GDP), costs for businesses related to private security and electronic surveillance can be up to eight billion reais, the prospective costs growing higher and higher, with a 10% rate increase per year.

Although Becker (1968, p.170) has claimed that “[…] ‘crime’ is an economically important activity or ‘industry,’ notwithstanding the almost total neglect by economists,” recently some economists have shown an interest in this problem, positing that an increase in criminal activity can cool the level of economic activity in a region by discouraging new investments, product prices are inflated with the inclusion of security costs, among other factors (Borilli and Shikida, 2002). All this without taking into account that part of the resources and acting productive agents in the crime could be allocated in the legal productive sectors of the economy, generating benefits for society as a whole (Fernandez, 2003).

But what can be defined as an economic or lucrative crime? Outside of legal issues, crime can be classified in two groups: the lucrative (or economic) and the non-lucrative (or non-economic) (Becker, 1968). As examples of economic crime there are: theft, robbery, extortion, usurpation, swindling, embezzlement, crimes against immaterial property, against the public trust, against public administration, narcotics trafficking; in the case of non-economic crime there are all cases which are not included in the first category, for example, homicide, rape, abuse of power, torture, etc.

Becker (1968) reaffirms that there are crimes that have the specific objective of appropriating public resources, or rather, financial gain, with or without the use of violence. In this sense, the economic criminal can be viewed as a “businessman,” who is described by Schaefer and Shikida (2001) as an agent that will organize his production, combining available productive factors, and taking on the inherent risks of criminal activity. The criminal “businessman” also expects to make a profit or a loss. In the case of a failure of a criminal operation, the loss could mean punishment foreseen in the Penal Code.

If lucrative crime is part of the economic issue, even being included as an object of study in the Economic Sciences, the central question that emerges from this context can be summarized as: what are the socioeconomic circumstances of an occupational decision between the legal and illegal sectors of the economy, and why do individuals decide to perpetrate economic crime? To analyze these aspects in a sampling of defendants – tried and convicted – originating from the CPC, SPP, and WPP, according to primary data obtained via the use of questionnaires followed by an interview that could elucidate issues that other methodological lines of research prevent. However, one must recognize the importance and the necessity of the scientific study as a tool for the development and implementation of political crime prevention and combat, with one different aspect, the causes and other facets of for-profit criminality are explicitly stated and discussed by the criminal.

That being stated, the hypothesis that will be tested in this article, restructuring Becker’s theory (1968), is the following: individuals migrate to illegal activities in the hope that the expected gains outweigh the risks. The undertaking of economic crime is an individual decision made rationally, according to the perception of costs and benefits, just as individuals make in relation to other daily decisions.

Beyond this brief introduction and explanation of the problem, this paper is subdivided into three sections. The second section presents the methodological procedures utilized; the third section presents the results pertinent to the use of questionnaires via interviews in the CPC, SPP, and WPP. Final considerations will summarize the research.

2 Methodological procedures

This paper deals with a case study and is characterized through the identification of the factors that determine or contribute to the phenomenon analyzed herein. This type of research can be derived equally from confirmation and perception guided by development, clarification, or modification of concepts and ideas, such as the description of the characteristics of a given population or phenomenon (Gil, 2000); Yin, 2001).

In the development of this paper the qualitative approach (Godoy, 1995) was used as the principal technique. This approach contributes to an understanding of the economy of crime through observations collected from primary sources, obtained via the use of questionnaires/interviews given to defendants tried and convicted of economic crimes (Becker, 1999).

Equally, this research was based on a type of non-probabilistic demonstration, classified as a possible demonstration or by accessibility (Gil, 2000). It is not a method considered to be rigorous from a statistical point of view, however, in this study, it is the interviewed subject who does or does not decide to respond to the question directed to him; in particular, there are always criminals who are not willing to cooperate, for various reasons (fear that the research might compromise their partners and future actions, fear that the research might be a State ploy designed to further incriminate them, etc.).

However, the technique used to obtain this information allowed for greater flexibility by adapting itself to a diverse set of problems and informants, probing, in cases in which it was necessary, into specific doubts, helping the researcher detect information beyond the answers offered by the person interviewed. In this way the direct contact between the researcher and the subject allowed for the maximum exploration of the studied topic (the economy of crime), with the purpose of obtaining, not only the facts inherent to the questionnaire, but a feeling for the person interviewed. The average time devoted to the questionnaire during the interview was around 30 minutes. The following section presents the results and further discussion.

3 Results and discussion

In total, 262 individuals were interviewed (144 in the CPC, 65 in the SPP, and 53 in the WPP). This means, in general terms, that approximately 58% of the pool available for research – after subtracting non-economic crime, monetarily minor economic crimes characterized and treated as petty[4], and those that did not want to respond-, which is acceptable for this type of research (Gil, 2000).

Before discussing the aforementioned results, consider that statistical analyses will be done for the 262 interviews in their entirety, without separation by researched units (CPC, SPP, and WPP). This practice stems from the necessity of protecting the anonymity of the person interviewed (as suggested by Penitentiary Directors, judges, and people connected, directly or indirectly, to the practice of criminal law, the data will be used in the sequence of this paper).

3.1 Profile of those interviewed

In regards to their principal aspects, referring to the general data extracted from the questionnaire given in the interview with detainees tried and convicted of economic crimes, one observes that 79.77% of the cases are attributed to the male sex and 20.23% female. This data conforms to the national context, where there is a predominance of male prisoners.

Equally, studies done by Lemgruber (2000)     have shown rising female criminality in the last years, in accordance principally with great female participation in diverse socioeconomic activities, which generates new opportunities, including insertion into the world of crime.

In addition to gender, the profile of those interviewed reaffirms a white majority (74.81%), the majority of whom are no older than 28 (85.49%), originating from Paraná itself – half-urban (67.17%) and religious (69.84% say that they are Catholic, 13.74% Evangelical, 0.38% spiritual, 0.38% Protestant, 2.30% belong to other religions, being that 13.36 claimed to not have any religion).[5]

To relativize, in the state of Paraná the proportion of whites is 75.9%, followed by mixed (20.8%), black (2.2%) and yellow (1.3%) and in relation to the distribution by comparison effect with age group data from the population of Paraná, one observes that 17.9% is found in the 20 to 29 year grouping, in other words, there is an expressive link in the migration of young people towards criminal activity, given the comparison of 85.49% vis-à-vis 17.9% (IBGE, 2008). This distribution continues a national and regional tendency that says that the greatest numbers of practitioners of crime are young people. Andrade and Lisboa (2000a), for example, call attention to the fact that young people migrate easily towards illegal activities, whereas older people present less mobility between legal and illegal activities.

3.2 Analysis of socio-educational questions of those interviewed

In regards to the level of education, it was confirmed that 4.20% of those interviewed have no education, 80.92% only have primary education and 14.50% secondary education, and only 0.38% have higher education, which suggests that high levels of education can curb and/or stop criminality.

The issue of education must be correlated with the national educational data, in which 13.8% of the population over 15 years old are illiterate, another 30.5% are functional illiterates, or in other words, people that have less than four years of education, know how to read and write in a rudimentary way, but are incapable of understanding longer texts (IBGE, 2008). In relation to the educational level of those in jail, a study completed by Brandt (1986) demonstrated that 3% of the prison population in Brazil is illiterate. However, in this respect, one observes that the fact of being illiterate is not an essential element of criminality, as the specificity of the crime to be committed determines the pre-requisites for recruitment of new members in the crime world, or rather; the selection is made in accordance with the specificity of the crime and the victim (Adorno et al., 1995).

It is worth stating that 85.12% of those interviewed who presented an educational level of at least primary schooling showed variation in the type of crime committed; however, of the 39 prisoners (14.88%) with higher education, secondary and college, one observes more audacious criminal practice and with a much more complex level of organization and planning. Thus, the lesser incidence of illiterate individuals in crime could be related to the technical demands of the crime, in which more elaborate plans make education an important requisite in the execution of the job.

Among the motives related by those interviewed justifying their decisions to temporarily quit or drop out of school, resulting in lower education levels, factors related to socio-economic order stand out, in which the need to contribute to family income was cited by 32.82% of those interviewed, the inability to adapt to a school environment by 16.41%, involvement with crime, drugs and delinquency by 15.65%, motives related to marriage and/or a stable union were cited by 10.68% of those interviewed. Consider that the familiar item – family disintegration, educational neglect and lack of support – was mentioned by 17.56%; lack of educational structure and difficulty of access by 6.12%, the influence of third parties was mentioned by 4.58%; and other motives represented 11.45% (questions related to pedagogical method utilized by the professors, friction between colleagues, and lack of motivation). Thus, “[…] they are reuniting in gangs, young men […] that, after several repeat offenses, leave school and are unable to obtain the educational level necessary in the job market of a globalized economy” (Zaluar, 2004, p. 201).

3.3 Familial structure of those interviewed

In relation to the familial structure of those interviewed it was confirmed that, more than half, 51.58%, were found to be single, divorced, separated, or widowed, while, 48.42% were found to be married, unmarried but living together, or unmarried but loosely involved with another person. However, to emphasize, in regard to the marital status of those interviewed, of those that affirmed living with a partner, 31.68% said that they had already had other marriages before the period in which the crime was committed.

From the information collected, one sees that the family, while one of the foundations of a well-functioning society, is not being employed as an ally in combating crime and/or passing good customs on between members. However, a correction is needed on this point, as, of the 16.42% of those interviewed that were listed as “single,” or rather, without any family, the absence of family was an additional motivating factors in criminal activity. An important assertion can be derived from this, which might be: what is important in the crime-family relationship is not simply its composition, but an existing interrelation between the members that compose it, in the sense of passing on sound customs to its member.

Considering that the majority of the criminals interviewed are young, belonging to a group between 18 and 28 years old, an analysis is necessary of the socioeconomic conditions of their family structure, in other words, the conditions of employment, level of education, profession, and marital situation of the parents.

In regards to the employability of the parents, it was confirmed that 73.76% were employed at the time the crime was committed by their children (those interviewed). However, the analysis of the various occupations of the parents suggests that income might be, in general, moderated, taking into account the level of education. With the effect that, as regards the level of education of the parents of those interviewed, one sees that 29.78% did not have any education, 62.59% had just a primary education, 4.58% had a secondary education, and 3.05% had higher education.

Furthermore, in relation to the parents of those interviewed, one sees 49.62% were married at the time of their children’s crime, and that 50.38% of marriages had been annulled.

The issue of family structure correlated with criminality, according to the research data, allows one to say that 37.78% had criminal predecessors, while (62.22%) did not have criminal predecessors within the family. It is important to emphasize that, among those that had criminal predecessors; the family tie for the person interviewed was, in the majority of cases, with the father, siblings, or cousins.

The relationship between those interviewed and drug use was shown to be significant as the majority (60.68%) claimed to be smokers, and 57.25% were regular consumers of alcoholic beverages. On the other hand, 53.44% declared themselves as users of illicit drugs – marijuana, cocaine, crack – at the time of committing the crime. Of these, 15.27% said that they still (on the date of the interview) use drugs, in spite of being incarcerated and under surveillance.

In this case, the function of the family structure stands out – composed of processes of interfamilial relationships, economic aspects, moral values, ethics – in which diversity and interdependence revitalize and control, inhibiting a tendency towards crime. The weakening of these mechanisms of control, exercised naturally by people that make up the family structure, could lead to social disorganization, which could be directly related to the problem of criminality.

3.4 Tipology of crimes practiced by those interviewed

The difference between material interest and the possible income received can have an influence in determining the type of crime to be committed, or rather, the victims were chosen by their characteristics, socioeconomic conditions, habits, familiar characteristics, and the places where they live. In relation to the results of the typology and aspects of economic crime, the research confirmed that 50.38% of those interviewed committed robberies, 27.48% larceny, 26.72% drug trafficking, 16.80% theft, 2.30% swindling, 1.90% kidnapping, 1.53% extortion ad 6.10% other crimes.

In this sense, Pezzin (1986) argues that the criminal can be economically motivated by a cost/benefit analysis of the crime, being that the option of lesser cost, in order to obtain an efficient quantity of crimes, involves resource allocation decisions in all of the sectors that effect said criminal activity.

Repeat criminal offenses were confirmed in the research, as 65.27% of those interviewed were repeat offenders and, in the majority of cases, involved in the same type of crime. This percentage is greater than that indicated by Ilanud (NATO) that shows that 45% of Brazilians in prison, that served time in jail, became repeat offenders (Crime and punishment, 1999). This data from the research (65.72%) is greater than the average in Paraná that, in the last years (2000- 2004), had a repeat incarceration rate of 31.38%. This recidivism has to do with characteristics possessed by the criminals, or rather, a tendency to repeat offenses after being inducted into the “industry” of crime, admitting that experience in criminal activity might lead to a reduction in the costs of the execution of the petty crimes, reduction in the moral costs involved, and less costs of opportunity, due to the stigma and the loss of human capital that an ex-criminal faces in the legal market (Fajnzylber and Araujo Jr, 2001).

On the other hand, recidivism can be read as one of the indicators of the ineffectiveness of the mechanisms of social control and also, as a reflection of the inefficiency of the preventative and repressive measures utilized by the state to combat economic crime (Fernandes and Fernandes, 1995).

The criminal behavior linked to other symbolic associations relates the use of fire arms in the act of economic crime, the use associated with the idea of easy profit, conquering women, confronting death, the conception of the completely free individual, which reveals that the practices of the criminal world are linked to acts of virility (Zaluar, 2004). According to data obtained in this study, 55.73% of those interviewed possess a fire arm, and 48.09% put the fire arm to use in the practice of a crime.

In relation to criminal practice, the crime can be committed by an isolated individual or collectively (organizational). The individuals act individually when the results of the action “[…] individual and independent can serve the interests of the individual so well, or better still, of an organization” (Olson, 1999, p. 19). In relation to this – the actions of the criminals in forming groups – data from the study demonstrates that 72.52% acted in groups and 27.48% acted alone, or rather, without the help of partners. “Organized crime is of a diffusive nature, that is characterized by the absence of individual victims, by the small visibility of the damages done, just as by a new ‘modus operandi’ (professionalism, division of tasks, participation of unsuspected people, sophisticated methods, etc.)” (Gomes and Cervini, 1995, p. 56). What stands out, in this regard, is the spontaneous observation made by the researcher upon perceiving the fear in the answers to this specific question, which may have indicated the possibility of putting a “partner” at risk that might still be involved in illegal activities.

Therefore, it is necessary to consider that organized crime possesses a kind of business structure for the execution of illicit activities, articulating production factors (capital, people, technological specialization) and with the profit obtained they organize legal businesses, to transformer illegal income into legal income, with the objective of covering up the criminal operations and justifying the amount of money to the auditors. It is a crime composed of important business men that lead a superficially irreproachable life (Fernandes and Chofard, 1995).

Many of the individuals that committed crimes (24.43%) knew the victim, and 75.57% said that they did not know the victims. However, according to the answers of those interviewed, the environments, habitats and external signs of wealth of the victims were considered bait by the criminals. Suffice it to say that these individuals are commonly rational and impetuous, opportunists in the face of a propitious and exposed environment, totally unconcerned with moral dimension of the business or with social wellbeing (Brenner, 2003). On the other hand, the behavioral model (Glaeser et al., 1996) raises the point that high variation in the frequency of crimes across space is evidence of the existence of social interaction between the criminals. In this case, the individuals commit crimes serving their own attributes and in the decisions of their neighbors.

The motivating factors that caused those interviewed to practice crime were diverse. However, those that stand out are: 1) inducted by “friends” (negative influence of outer groups and/or third parties) at 32.44%; b) greed/ambition at 23.38%; c) maintain the support of the addiction; d) irresponsibility and a desire for adventure at 14.12%; e) financial difficulty (debt, for example) ad the idea of easy profit, at 11.83% of those interviewed; f) help with family expenses in the case of those unemployed at 10.30%; g) the lack of familial structure and guidance (unpreparedness for life) at 9.16%; h) trivial motives (drunkenness, lack of perspective, etc.) at 8.78%; i) help with family expenses in cases were incoming money was insufficient (for those employed) at 7.25%; j) to maintain social status at 6.10%; k) jealousy at 1.15%; and other causes beyond those already cited at 6.10% of those interviewed.

In further analyzing the results, it suffices to mention a few reflections. One observed that the influence of “friends” was a determining factor for 32.44% of those interviewed that migrated towards crime. However when questioned about the existence of a relative and/or a near acquaintance that may have influenced the person interviewed in the practice of a crime, it was confirmed that the majority (51.35%) suffered some type of influence. This confirmation solidifies the social interaction thesis and reinforces the importance of the family/crime relationship not only in the simple composition of the family, but across the existing interrelationship between the members that constitute it, in the sense of passing on “good” and “bad” customs to their members.

Another important aspect to point out is that the majority of those interviewed were working during the period in which the crime was committed. However, the association between criminality and low levels of education was confirmed. The broad view demonstrates that better jobs with better compensation can negatively influence the entrance of individuals into the practice of economic crime. Underemployment, through low salaries, in itself insufficient for self-sustainment or of the family, does not stop being, because if its pronounced characteristics, from personal and socioeconomic instability, one additional influencing factor in the ascending curve of criminality (Fernandes, 1995). It is worth noting that research data indicated that financial difficulty, unemployment, and the necessity of helping with family expenses caused 29.38% of those interviewed to practice crime.

Confirming data already covered, young people enter into the world of crime, according to Zaluar (2204), because of drug use – extorted and criminalized -, and end up in the hands of drug traffickers and thieves, becoming victims due to debt collection, division of profits with corrupt police, or integration into organized crime and other extortive groups.

Thus, the motives that caused the practice of economic crime are of a social nature, a structural/conjunctive nature, connected to individual causes, generally considered to be of a socioeconomic and psychic nature (greed; ambition; easy profit; envy; induction of friends; unemployment; financial difficulties, lack of family structure; among others).

3.5 The socioeconomic profile of those interviewed during the period of the crime

In a capitalist society, as a general rule, the occupations with the best compensation demand a higher level of schooling. Upon analyzing the professions occupied by those interviewed during criminal act, professions demanding little educational background were flagged, with a few rare exceptions. In this respect, as a result of the low level of schooling of those interviewed (greatest occurrence through primary education, with 85.12%) the majority of related professional activities suggest low salaries. This favors the thesis that the economic theory of crime might also be associated with structural and conjunctive problems.

In this same perspective, results from the research reaffirm the previously mentioned studies, which say in respect to the expressive rate of those interviewed that, in the period of the practice of the crime, 68.70% were working, although 10.30% of those interviewed stated being unemployed as motivation for the practice of the crime.

However, the crime/unemployment relationship did not appear in a relevant manner in this study, as the majority of individuals that practiced criminal activities were employed. It is emphasized that the unemployment rate in the state of Paraná, according to the Institute of Development in Paraná (IPARDES, 2008), was 6.40% in December 2002, 6.50% in December 2003, 7.20% in the December 2004, and 7.60% in July 2005.

Analyzing the issue of the percentage of those interviewed that declared themselves as working during the period of the crime (68.70%), of these scarcely a small percentage (29.39%) were formally registered in the “Carteira de Trabalho e Previdência Social” (CTPS).

Upon inquiring if the income received by those interviewed was sufficient to maintain their basic expenses, 60.30% affirmed positively that the income received was sufficient to cover the basic expenses of the family. Suffice it to say that the average income declared by those interviewed neared 3.2 untaxed minimum wage salaries (R$ 960.00, but with considerable room for variation). This reinforces the thesis that people migrate towards activities considered illicit because of other, stronger reasons, such as the influence of friends and individual disposition (greed and ambition, easy profits and the continuation of status), in the hopes that the expected profit exceed the income originating from legal activities.

Suffice it to say that from the perspective of Becker (1968), referred to in Balbinotto Neto (2003), individuals become criminals because the benefits are worthwhile, when compared with other illegal activities, taking into account the risks, the probability of apprehension, condemnation, and the severity of the punishment. It is worth emphasizing that an individual, upon rejecting a guaranteed income and opting instead for riskier assets with the same expected income or greater, is considered a risk lover (Pindyck and Rubinfeld, 1994). It was confirmed as such that criminals migrate to illegal activities in the hope that expected profits outweigh the costs.

Still in relation to the socioeconomic conditions of those interviewed, it was verified that 48.84% possessed property. Upon correlating this data with the age, the level of schooling, activities developed and income, it was confirmed that, with great difficulty, the individual changed his or her living condition in the legal activities of the economy. This confirmation thusly meets the hypothesis developed by Fajnzylber (2000) that criminals attribute a monetary value to crime, and they compare this value to the monetary cost involved in carrying out the crime.

Upon studying the economy and crime in the states of Minas Gerais, Rio de Janeiro, and São Paulo, Andrade and Lisboa (2000b) confirmed that the real increases in salaries causes individuals to return to legal activities, reducing their participation in illegal activities. Therefore, in a capitalist society, some crime functions as a rational response to the structure of the institutions through which society expresses itself.

3.6 Results of criminal activity

The data from the research demonstrates that the majority of those interviewed had a clear vision of the degree of risk that they were running by practicing an illegal activity, as 41.95% considered the degree of risk greater than a 7 (on a scale of 0 a 9). For 24.82%, the degree of risk oscillated between 4 and 6, considering moderated risk. For the others, 33.59%, the degree of risk was less than four. However, for this group of those interviewed the risk did not represent danger, as they considered the activity to be normal.

In general, one can say that, even with little schooling, the majority of those interviewed knew very well of the risk of the illegal activity that they were undertaking.

Beato, Peixoto, and Andrade (2004), with particular clarity, observe that, in the practice of economic crime, the victims are chosen amongst those who offer the least possibility of resistance, those which represent a lesser risk of imprisonment for the aggressor. On the other hand, those victims that promise greater economic return are selected by risk-loving criminals, once that, in spite of the risk of imprisonment, the criminal can earn much more.

The insight of the rationality of the individual that commits economic crime was also confirmed by studies developed by Borilli (2001) and Schaefer and Shikida (2001), evidenced in relation to risk in the structure of the crime market, being that, in criminal activity, a hedonistic principal of maximum gain with minimum effort is implicit, this for various degrees of risk (Fernandez, 1998). As a consequence, what Pindyck and Rubinfeld (1994) exposed was also confirmed, that is, some criminals appreciate risk, especially when they commit crimes with greater possibilities of apprehension and punishment – this in relation to individualized values of risk.

In regards to the failure or success of the illegal activity, among those interviewed nearly 27.87% said that they never obtained success in their criminal activity and 72.13% obtained some success. The lack of success of the criminal activity, according to those interviewed, stemmed from factors such as: getting fingered (ratted out – turned in by a partner) at 43.90%; police action at 37.40%; and one’s own errors – carelessness and mistakes – at 19.85% (Table 1). This demonstrates, in a certain way, the vulnerability of the individual and collective organizations studied when it comes to economic crime as an illicit activity, and/or reaffirms a certain efficiency in the institutions responsible for the repression of crime.


Table 1 – Factors that lead to failure to carry out a crime

Debilitating factors                       Quantity              %
Betrayal                                           11                 4.20
Ratted out                                       115                43.90
Personal failure                                  52                 19.85
Partner’s failure                                 14                 5.34
Police action                                      98                 37.40
Security system                                    4                 1.52
Successful self-defense by the victim     0                 0
(with gun)
Successful self-defense by the victim     5                 1.90
(without gun)
Other                                                   17                 6.49
Source: Research data (2005)


However, as an item of interest in the interview, the lack of success that the interviewed person refers to is not correlated to punishment, but to the economic return never obtained.

In this context, economic analysis of the crime is strongly based on the crime/punishment relationship as a determining factor of the rate of criminality, in which police and judicial efficacy are related to the possibility of the benefits of the criminal activity, supplanting the costs and making up for the stipulated risks (Fernandez, 2003; Balbinotto Neto, 2003). Because of this, the punishment must serve the purpose of punishing, restraining, and intimidating. The punishment must be greater than the economic return expected by the criminal, so that the punishment is effective in curbing first and repeat offenses (Fernandes and Fernandes, 1995). Time spent by the criminal in illegal activities is a social loss, as this time could be used in legal way. Thus, the conclusion that the crime must not pay is the solution that must be sought by society (Brenner, 2001).

However, upon analyzing the data related to expected economic return on a scale from 0 to 9 (considering 9 to be the maximum expected economic return), it was verified that 19.86% of those interviewed did not achieve any kind of success in the practice of illicit activities; for 16.41% of those interviewed the return was less than expected (between 1 and 3); for 23.28% the expected return was between a 4 and a 6. However, for 40.45% of those interviewed the economic return was greater than 7. This demonstrates that the probability of achieving success in illegal activity can be considered significant, principally if one considers the risk and the varying degree of organization declared by those interviewed.

During the course of the interviews, one observed that some of the accused studied, although deprived of the right to come and go, were “satisfied” in a way with the profit obtained through economic crime.

In fact, the success of criminal activity, just as legal activity – in a capitalist society – is correlated with profit. However, the businessman – in the illegal sector – is the person that organizes his or her activity, reuniting available productive factors, and taking on the inherent risks of the pursued activity, being able to perceive profits or incur losses that, in the last case, can culminate in punishment – deprivation of liberty (Schaefer and Shikida, 2001).

The results of the study also indicated that, for 80.14% of those interviewed, the criminal activity resulted in some degree of success, being that, for 19.47% of these cases, the return on the criminal practice reached the maximum grade – equal to a 9.

In service of these notes, the results were tested using a more rigorous statistical analysis, using the t Test from the averages of two paired samplings.

The t Test from the averages of two paired samplings (the question of economic risk and its various levels– from 0 to 9 as indicated by the accused – was compared vis-à-vis economic return and its various levels – from 0 to 9 – also indicated by the accused) showed that, on average, risk and return were equal, with a margin of error of 5%. In this case, according to Schaefer and Shikida (2001), if, on average, risk and return are equal (the same idea of no difference between receiving a guaranteed income and receiving an uncertain income, but that might present the same expected return), and being a familiar-educational-socioeconomic base of the detainees considered vulnerable, the migration towards crime becomes viable. And this remains a factor of concern in this study.

This stated, the research data speaks to the basic argument of economic entry into crime upon considering that the accused react to incentives, as many positive as there are negative, and that the number of economic crimes committed is influenced by the allocation of public and private resources to inhibit them through the lay and other means. Therefore, in accordance with Balbinotto Neto (2003), economic crime is a grave problem for society, by one measurement it is worth while to commit them; this entails significant costs in social terms.

3.7 Evaluation of the operation of the justice system by those interviewed

The effectiveness of the justice system in the prevention of economic crime, can contribute to the reduction of the incidence of crimes. However, the action must be just, applied quickly and infallibly, if not done as such it is possible to instigate criminal action through an atmosphere of impunity, being unable to serve the real function of intimidating and discouraging criminals.

In relation to the operation of the justice system, the majority of those interviewed (77.10%) considered police action to be inefficient in curbing criminal activity, while 22.90% considered their actions to be sufficient. The principles sited by those interviewed in regards to the discredited system were basically: corruption, the involvement of police agents in organized crime, the inadequate police treatment of criminals and the lack of equipment (police cars and others).

In accordance with Silva and Gall (2002), some of the causes of an increase in criminality are in the atrophying institutional structures and in the failure of police chiefs, lobbyists, and “leaders”, with little or no experience in the police work. Corroborating, Caldeira (1991) says that, not only criminals transgress the law, but also that Justice does not work, that the police fail and disrespect the law.

Currently it is clear that the punishment of prison is expensive and ineffective; it does not inhibit criminality, it does not reduce the criminal agent and, many times, it stimulates repeat offenses. Criminals that already served sentences leave the penitentiaries, in general, worse and, upon a repeat offense, commit crimes that are more serious (Lembruber, 2002).

On the other hand, it was verified beforehand that 37.40% of those interviewed pointed to police action as the factor that lead to the failure of the criminal activity, and for 19.86% of those interviewed, the criminal activities did not provide the economic return expected. For these two groups, one can infer the old criminal maxim: “crime doesn’t pay.”

The legal system was also pointed to as a factor of failure of criminal activity, due to existing disparities between the sentence and the type of crime practiced, in other words, some sentences are very long, and others very severe in relation to the social damage caused. However, many individuals that practice crime, that should be serving a sentence, are enjoying personal benefit from the social status obtained through a public position, according to those interviewed.

Furthermore, in relation to the legal system, the slowness, the lack of information about the cases, the delay in the review of cases, the lack of social and legal assistance and the inadequacy of the installations (prison system) are pointed to as discrediting factors. According to Silva and Gall (2002), in relation to the judiciary system, one observes, for example, the reduced number of judges that exist in Brazil (1 in 23 thousand people, in Germany there are 1 in 3.5 thousand people), the antiquated and bureaucratized legal processes, among other problems.

The credibility gap in the judiciary system contributed to 50.30% of those interviewed having attempted to escape from the institution in which they were serving their sentence. Factors related to the lack of legal and medical assistance were pointed to as motives for the break. This scenario justifies the elevated number of escapes and the ease in which drugs enter (according to research, 15.27% of those interviewed affirmed continuing drug use). The entry of guns and cellular phones points to worryingly high corruption levels. Economic crime originating from these new phenomenons, like organized crime, and the crimes of power (economic criminality and the financing of public power) are not contemplated with effectiveness by the current legal system. Organized crime, as in the case of drug trafficking, imposed a new paradox: “[…] the State has to denationalize and trans-nationalize its coercive and repressive power so that it can deal with its national problems” (Mir, 2004, p. 388).

The study also confirmed, that it must be emphasized that what effects sentencing showed that, among those interviewed, 33.97% spoke out in favor of the institution of capital punishment, and 66.03% against it. Although they are deprived of freedom, the percentage that favors capital punishment is telling. This is justified by the fact that they do not believe that capital punishment is served to those who practice the crimes they practice, only to those crimes of extreme severity typified by legislation as “heinous crimes” (excepting drug trafficking, not considered “heinous”).

3.8 Factors that can diminish criminality in the conception of those interviewed

In relation to what could be done to diminish crimes of an economic nature, those interviewed, in large part, pointed to: more professionalizing education, more employment with higher pay; changes in legislation – severer sentences-; effective politics to combat drug trafficking – ending the commerce of drugs -; assistance in egress – ending prejudices, discrimination against the ex-offender, the stigma of the prisoner being identified or labeled a deviant, limiting his or her socioeconomic opportunities.

Correlating the factors pointed to in the reduction of crime by those interviewed with the data indicated earlier, in which 85.12% of those interviewed had completed an elementary education, and 68.70% of those interviewed were working in the at the time of the act of the crime, it becomes evident that the crime/unemployment relationship is not verified as strongly in this study, as the majority of the individuals who committed economic crimes were working. However, the importance of investment in education and the best employment opportunities is corroborated – but, it is worth stating, with greater pay -, as a form of diminishing and curbing crime of an economic nature, according to those interviewed.

4 Final considerations

As a corollary in this study, the hypothesis that criminals migrate to illegal activities in the hopes that the expected gains outweigh the risks was not rejected. Opting to commit crime of an economic nature is an individual decision made rationally, with or without the influence of third parties, in the face of the perception of costs and benefits, just as individuals do with other decisions of an economic nature. Criminals act individually when the results of the criminal action serve their interests so well, or better than collective action.

This confirmation, however, must be relativized because in this study the problem of biases exists in the selection of the sample base, as it takes into account people that committed crimes and were taken prisoner. It is possible that many people that commit crimes and that are not imprisoned have their own socioeconomic characteristics due to possible institutional problems such as corruption. For now, this study depicts the characteristics of those criminals that are imprisoned and not criminals in general. In this way, the results aim at what causes someone to commit a crime (someone who was effectively imprisoned).

Last but not least, as this study dealt with a case study based on questionnaires given to people that are serving sentences in three established prisons in Paraná, fundamentally making use of primary data (there is little in the area of economic crime in Brazil), it is suggested, as a future extension of this work, that more studies be implemented to examine new contexts at levels that this sampling did not allow for.

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[1] Economist, Dr Pery Francisco Assis Shikida, Associate Professor of Economy, Universidade Estadual do Oeste do Paraná – UNIOESTE (Adress: Rua da Faculdade, 645. CEP: 85.903-000. Toledo, PR – Brasil). Researcher in CNPq. E-mail:

[2] Economist, MSc. Salete Polonia Borilli, Assistant Professor, Universidade Paranaense – UNIPAR (Adress: Av. Parigot de Souza, 3636. CEP: 85903-170. Toledo, PR – Brasil). E-mail:

[3] To revisit the economy of crime, see: Shikida (2005); to see some applications of the economy of crime, see: Ehrlich (1996), Glaeser et al. (1996) and Araujo Jr. (2002).

[4] One attempts to characterize, in this sample, the profiles of the “greater” criminals, kidnappers, drug traffickers, etc. For the interview, for example, if there was a trafficking “grunt,” an interview with the leader was preferred, not the grunt, in other words,, within economic crimes, those whose punishment was raised due to the severity of their actions were separated.

[5] Of those that responded that are religious, 40.84% claimed to be practicing and 59.16% claimed to be non-practicing at the time of committing the crime. It was still confirmed that 24.81% of those interviewed changed religion after their release from the penitentiary system.

Texto incorporado el: 2010/02/12. Revista de actualización permanente. Se recomienda citar: Apellido, Nombre. "Título del trabajo" en Revista electrónica Derecho Penal Online [en línea]. Disponible en:

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