Governing Markets or Governing Crime? Explaining Variance in the Regulation of Global Illegal Markets and Trafficking Chains

The governance of illegal markets has become a regular subject of research on the global political economy following the proliferation of regulatory initiatives that target illicit transactions. What is missing so far, however, is a discussion on whether global illegal markets are primarily markets that encompass illegal transactions, or whether they are primarily crimes that consist of market transactions. We analyze illegal markets against the background of rationalist understanding of global governance and global value chains, distinguishing different types of illegal markets. We show that, while the central aim of governance is bringing transparency to value chains, global governance efforts differ depending on whether they target the source or the possession of goods, and on what we define as producer- or buyer-driven trafficking chain. Moreover, depending on whether market governance or crime governance prevails, instruments and rationales for transparency differ – in the former case, transparency in value chains aims mainly to exclude illegal markets and actors engaged in trafficking from the value chains, while in the latter case, transparency functions to detect and punish crime. We examine these relations in different case studies, including timber.