Sexual services, drugs and human trafficking, smuggling – in GDP figures: Quality of life indicators

Rīga Stradiņš University, Riga, Latvia

Abstract

In recent years different kind of antisocial and criminal activities, according to the EU regulations, are being included in GDP indicators. The activities, included in GDP indicators are as follows: those of criminal nature (drugs, arms and human trafficking, corruptive activities, etc.); illegal activities, which are not of criminal nature (businesses without licenses and special permits, poaching, etc.); legal activities, though the income from them is not taxed and not recorded (prostitution, alcohol production, etc.); illegal use of intellectual property objects (illegal use of unlicensed programmes). Estimates on the inclusion of illegal, among them criminal activities in GDP indicators are important not only to learn the actual size of GDP, but also to give a chance to the law enforcement authorities to pay attention to separate areas of unregulated economic activities. The author of the article outlines the approximate extent of illegal and informal economic activities and their share in GDP, describes the methods of determination of the economic sector, as well as analyzes some separate informal economic sectors, which should be included into GDP.