Author: Sjoerd Hooijmaaijers, Sander IJmker
Estimating illegal activities in the national accounts

Summary

European regulations for compiling macro-economic statistics prescribe to include all economic activities, including illegal ones. As a result Statistics Netherlands (CBS) began including illegal activities and informal activities in the national account estimates for the Netherlands in 2014, Logically, these estimates are affected by greater uncertainty, and we have to use different methods and sources from those for legal activities. This article provides insights into the latest estimate for the 2021 reporting year, with a particular focus on the difference between illegal activities conducted within Dutch national borders and the activities that ultimately contribute to the Dutch economy. Cocaine trafficking offers a clear example of this disparity: although cocaine generates earnings of €10.7 billion within our national borders, only €1.2 billion is attributed to the Dutch gross domestic product (GDP). In accordance with the European directives, the remainder is allocated to principals outside the Netherlands.