Political Dynamics Shaping the Global Landscape of Illicit Trade

This study examines how institutional conditions shape the vulnerability of countries to illicit trade, focusing on state fragility, corruption, regulatory weaknesses and governance failures. Drawing on cross-national evidence, it highlights how weak institutions can create opportunities for illicit activities to emerge, persist and expand. The study distinguishes between regulatory gaps arising from limited institutional capacity and those sustained through deliberate practices such as selective enforcement and state capture. It argues that illicit trade cannot be explained by institutional weaknesses alone, as these interact with broader economic, political and transnational dynamics. The findings underscore the importance of institutional resilience, accountability, effective regulation and international cooperation in addressing the conditions that enable illicit markets to flourish.