Why is the fight against financial crimes such a central task for the EU? The EU has a strong interest to counter financial crimes and fraud against the EU budget as those crimes—so the EU legislator's claim is—hamper the trust in the market and undermine consumer confidence to engage in...

We use a stylized model to show that, if transfers to the poor are founded on a security argument, there is a negative trade-off between law enforcement expenditures and criminality. In contrast, if transfers are based on altruism, the correlation between the same variables may appear positive....