Hypotheses on the causes of financial crime

The purpose of this paper is to examine the aftermath of the 2006-07 financial crisis and attempts to identify a range of causes that were responsible for it and are likely to trigger similar events in the future. The analytical tradition established by the study of white-collar crime provides the background for such an examination, which avails itself of some conceptualisations derived from classical economic thought.

Explanations of financial crime can resort to general theories based on allegedly universal values. They can posit the existence of criminaloids, namely, individuals who indulge in illegal practices, or ‘honest fraud’, while not deeming themselves culpable. Anomie and control theory in criminology have highlighted how the causes of financial crime are associated with general criminogenic contexts or with individual propensities or mindsets. This paper adds to the existing perspectives a number of variables that can provide a more nuanced picture of financial crimes.

This paper attempts to identify a range of discrete variables that can be termed interstitial in the sense that they can accompany a variety of theoretical hypotheses, locate themselves in the space left in between the different approaches while providing supplementary analytical foci. Ignorance, entitlement, reverse Keynesianism, recklessness, efficiency and the finance curse may offer additional angles from which the causation of financial crime can be observed. Sociological and criminological arguments, in this paper, are interspersed with notions derived from classical economics.

The originality of this contribution is to be found in its use of different theoretical traditions, establishing a dialogue between social theory, criminology and economic thought.