Money is a limited resource. If money is accumulated illegally, this can prevent capital from flowing into a productive sector of a country’s economy. If an imbalance in money flow occurs, more money gets printed by the government. This can harm a country’s economy by hurting the purchasing power of their currency.
Furthermore, if left unchecked, organized crime can infiltrate financial institutions. They can also acquire control of large sectors of an economy though investment or bribes to public officials. If a criminal organization has economic and political influence in a country, it can degrade its ethical standards and whole society. In some instances, criminal activity can dampen the advancement of a country into a democratic system of government.
Ultimately, money laundering allows criminal activity to continue freely.