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Harvard Economics Review

Brothels and Budgets

By Angela Zhong


Introduction

Human trafficking has been widely identified as one of the most profitable illicit businesses in the world. However, statistics on this issue are very muddled as there are a myriad of misconceptions about sex trafficking specifically, especially for policymakers. For example, while some consider sex trafficking as something that occurs primarily in “third-world countries,” the United States ranks as the world’s second largest market with Germany in the lead. These numbers become less consistent, however, when considering the transnational basis of the industry. Additionally, the essence of sex trafficking remains unclear: when does this act become empowering versus economically coerced? How can we calculate something that, by nature, operates within the shadows? These concerns muddle the existing literature base but are extremely important for ensuring that victims of this atrocity receive adequate help.


Despite these inconsistencies, most of the literature has analyzed incentives for this behavior through the supply rather than targeting the demand. This is incredibly concerning as an economic model that fixates on the supply-side is insufficient to resolve the complex problem that rests at the intersection of poverty, sexism, violence, (lack of) education, and more; we understand that this is an industry with high profit margins and “reusable commodities,” yet have not been able to address existing structures. This limitation is one of the main shortcomings of comprehensive legislative efforts such as the United States’ Trafficking Victims Protection Act (TVPA). Put simply, laws need to ensure that the cost of engaging in commercial sexual exploitation must outweigh the benefits in order to change the high demand by adopting a zero-tolerance, off-limits approach.


Military Bases: a Case Study in the Demand-Driven Approach

Researchers recently found that U.S. military personnel were one of main perpetrators of the patronization of sex trafficking establishments, frequently fake massage businesses, residential brothels, bars, and strip clubs. Had the military not driven the rise of these institutions, it is unlikely that this industry of historical “comfort women” would be as prominent as it is today, furthering the necessary concentration on demand. Aside from the TVPA outlined above, there have been other efforts directed at the demand of the military in relation to sex trafficking. Past President George W. Bush’s National Security Presidential Directive 22 (NSPD 22) encouraged the initiation of a“zero-tolerance” policy towards any involvement of sex trafficking whatsoever. While the policy was rather narrow, the specific guidelines were key in targeting the buyers, dubbed “Johns,” of the business. By 2015, 90 percent of military members and civilian employees participated in human trafficking awareness training, a significant increase from the status quo. These stakeholders had their behavior and attitudes towards the issue challenged and reoriented. They were then more likely to then identify sex trafficking victims and the associated perpetrators that could then be held accountable. But perhaps most importantly, the stringent “off-limits” label towards any corporation that was suspected of involvement in sex trafficking cut down the use of the make-shift brothels significantly.


Recommendations and Conclusion

Though this is not a comprehensive analysis of sex trafficking in every circumstance, especially given that jurisdiction may become muddled or extralegal in other countries, it guides the way for future amendments. The next step would be to improve Strategic Action Plans (SAPs) as well as current Status of Forces Agreements (SOFAS) to react to these firmer recommendations and focus on how to best enforce the well-intentioned policy guidelines.


While a focus on the needs of the survivors or victims is still absolutely critical in conducting future stings and ensuring their welfare, we should not be letting the root cause of the problem fester by getting off scot-free. Enforcing the detailed legislation that targets the money supply is critical to ending this modern-day form of slavery.

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