draining development.pdf - Khazar University

Human Trafficking and International Financial Flows 189work as a coyote. We disagree with Andreas (2000) for whom the expenseinvolved for the traffickers and smugglers has led to a parallel process ofcentralization as smaller, poorer, and less sophisticated operators areforced out of the market.Many specialized roles have emerged in response to the particulartasks required in smuggling operations such as acquiring fraudulentdocuments, recruiting prospective migrants, serving as border crossingguides, driving smuggling vehicles, and guarding safe houses. These rolescorrespond to the successive stages of a smuggling operation: the recruiteris active at the beginning, and the debt collector at the end. Most ofthese activities take place in the host country and do not involve largeamounts of money. The income they provide tends to stay in the hostcountry and is probably quickly reinjected into the host economythrough consumer spending.Smuggling activities are normally carried out following negotiationsbetween the smugglers and their clients that leave few opportunities forothers to intervene. Smuggling operations consist in secretive and idiosyncraticarrangements known only to those directly involved. Furthermore,the contacts between the organizers of a smuggling operation andtheir clients are mostly one-on-one. This special business arrangementserves two crucial functions in an illicit economy: (1) it maximizes thesmuggler’s profit by monopolizing the services critical to specific aspectsof the smuggling process, and (2) it minimizes the potential exposure tolaw enforcement.Smugglers working along the border are the least skilled people in thetrafficking chain. The risk is limited, and the reward is small. There is nota lot of evidence to document the risk. Former border agents considerthat one in four illegal migrants is arrested, but many of these migrantsmake multiple attempts (Slagle 2004). The rates of apprehension by borderpatrols in Texas show large variations from one period to another(Orrenius 2001).According to Orrenius (2001), in real terms (1994 U.S. dollars), themedian reported coyote price per individual for a single crossing fellfrom more than US$900 in 1965 to about US$300 in 1994. Higher post-1994 prices (still below US$400) are consistent with the impact of greaterenforcement on smuggler fees. 8 Large profits come only with the largenumbers of people that can amortize fixed costs (such as regular bribes,