Smuggling around the World: Evidence from a Structural Equation Model

In recent years, the causes and consequences of smuggling have attracted much attention in the media, mainly thanks to academics and policy makers. While a large body of literature is devoted to theoretical aspects of smuggling, only few empirical studies deal with this complex phenomenon. This paper presents estimates from a Multiple Indicators Multiple Causes model in order to show, for the first time, the extent of smuggling for 55 countries around the world during the 1990s. Treating smuggling as a latent variable which is directly related to its underlying causes and indicators, an ordinal index of smuggling is derived. Additionally, a ranking of countries is provided.

Farzanegan, Mohammad Reza and Andreas Buehn (2008), Smuggling around the World: Evidence from a Structural Equation Model, GRAZ