IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v156y2013i1p95-103.html
   My bibliography  Save this article

The governance institutions of a drug trafficking organization

Author

Listed:
  • James Kostelnik
  • David Skarbek

Abstract

How do drug trafficking organizations organize? Drug trafficking organizations continue to operate effectively despite incentives for members to defect, pressure from damaged communities, and government interdiction efforts. This paper identifies the problem of defection in this context and applies insights from the literatures on club goods and extralegal governance institutions to explain the puzzling organization and activities of one of Mexico’s most dangerous drug trafficking organizations, La Familia Michoacana. The group uses a reward and punishment scheme to prevent defection from members and to elicit cooperation from the community and government. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • James Kostelnik & David Skarbek, 2013. "The governance institutions of a drug trafficking organization," Public Choice, Springer, vol. 156(1), pages 95-103, July.
    • Handle: RePEc:kap:pubcho:v:156:y:2013:i:1:p:95-103
    DOI: 10.1007/s11127-012-0050-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11127-012-0050-x
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-012-0050-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leeson, Peter T. & Coyne, Christopher J., 2012. "Sassywood," Journal of Comparative Economics, Elsevier, vol. 40(4), pages 608-620.
    2. Berman, Eli & Laitin, David D., 2008. "Religion, terrorism and public goods: Testing the club model," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1942-1967, October.
    3. Fearon, James D. & Laitin, David D., 2003. "Ethnicity, Insurgency, and Civil War," American Political Science Review, Cambridge University Press, vol. 97(1), pages 75-90, February.
    4. Oriana Bandiera, 2003. "Land Reform, the Market for Protection, and the Origins of the Sicilian Mafia: Theory and Evidence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 19(1), pages 218-244, April.
    5. Peter T. Leeson & Douglas Bruce Rogers, 2012. "Organizing Crime," Supreme Court Economic Review, University of Chicago Press, vol. 20(1), pages 89-123.
    6. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 755-789.
    7. repec:gig:joupla:v:1:y:2009:i:2:p:3-29 is not listed on IDEAS
    8. Michael Munger, 2006. "Preference modification vs. incentive manipulation as tools of terrorist recruitment: The role of culture," Public Choice, Springer, vol. 128(1), pages 131-146, July.
    9. Eli Berman, 2000. "Sect, Subsidy, and Sacrifice: An Economist's View of Ultra-Orthodox Jews," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 905-953.
    10. Peter T. Leeson & David B. Skarbek, 2010. "Criminal constitutions," Global Crime, Taylor & Francis Journals, vol. 11(3), pages 279-297, August.
    11. Michael Kenney, 2007. "The Architecture of Drug Trafficking: Network Forms of Organisation in the Colombian Cocaine Trade," Global Crime, Taylor & Francis Journals, vol. 8(3), pages 233-259, August.
    12. Varese, Federico, 2005. "The Russian Mafia: Private Protection in a New Market Economy," OUP Catalogue, Oxford University Press, number 9780199279494.
    13. Avinash Dixit, 2009. "Governance Institutions and Economic Activity," American Economic Review, American Economic Association, vol. 99(1), pages 5-24, March.
    14. Peter T. Leeson, 2014. ""God Damn": The Law and Economics of Monastic Malediction," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(1), pages 193-216.
    15. repec:wvu:wpaper:09-09 is not listed on IDEAS
    16. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 271-291, April.
    17. Skarbek, David, 2011. "Governance and Prison Gangs," American Political Science Review, Cambridge University Press, vol. 105(4), pages 702-716, November.
    18. Russell S. Sobel & Brian J. Osoba, 2009. "Youth Gangs as Pseudo-Governments Implications for Violent Crime," Southern Economic Journal, John Wiley & Sons, vol. 75(4), pages 996-1018, April.
    19. Leeson, Peter T., 2010. "Pirational choice: The economics of infamous pirate practices," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 497-510, December.
    20. Peter Leeson, 2009. "The calculus of piratical consent: the myth of the myth of social contract," Public Choice, Springer, vol. 139(3), pages 443-459, June.
    21. Peter T. Leeson, 2007. "An-arrgh-chy: The Law and Economics of Pirate Organization," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1049-1094, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ennio E. Piano, 2017. "Free riders: the economics and organization of outlaw motorcycle gangs," Public Choice, Springer, vol. 171(3), pages 283-301, June.
    2. William Luther, 2015. "The monetary mechanism of stateless Somalia," Public Choice, Springer, vol. 165(1), pages 45-58, October.
    3. Thomas Grisaffi, 2022. "Why Is the Drug Trade Not Violent? Cocaine Production and the Embedded Economy in the Chapare, Bolivia," Development and Change, International Institute of Social Studies, vol. 53(3), pages 576-599, May.
    4. Williams Gilberto Jiménez-García & Wilson Arenas-Valencia & Natalia Bohorquez-Bedoya, 2023. "Violent Drug Markets: Relation between Homicide, Drug Trafficking and Socioeconomic Disadvantages: A Test of Contingent Causation in Pereira, Colombia," Social Sciences, MDPI, vol. 12(2), pages 1-16, January.
    5. Peter Leeson, 2013. "Gypsy law," Public Choice, Springer, vol. 155(3), pages 273-292, June.
    6. Jean-Paul Carvalho & Mark Koyama & Michael Sacks, 2017. "Education, identity, and community: lessons from Jewish emancipation," Public Choice, Springer, vol. 171(1), pages 119-143, April.
    7. Rosolino A. Candela & Vincent J. Geloso, 2021. "Trade or raid: Acadian settlers and native Americans before 1755," Public Choice, Springer, vol. 188(3), pages 549-575, September.
    8. Escalante, Edwar E. & March, Raymond J., 2020. "Fighting on Christmas: brawling as self-governance in rural Peru," Journal of Institutional Economics, Cambridge University Press, vol. 16(3), pages 355-368, June.
    9. Bradley E. Holland & Viridiana Rios, 2017. "Informally Governing Information: How Criminal Rivalry Leads to Violence against the Press in Mexico," Journal of Conflict Resolution, Peace Science Society (International), vol. 61(5), pages 1095-1119, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roth, M. Garrett & Skarbek, David, 2014. "Prison Gangs and the Community Responsibility System," Review of Behavioral Economics, now publishers, vol. 1(3), pages 223-243, May.
    2. David Skarbek & Peng Wang, 2015. "Criminal rituals," Global Crime, Taylor & Francis Journals, vol. 16(4), pages 288-305, October.
    3. Skarbek, David, 2012. "Prison gangs, norms, and organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 96-109.
    4. Skarbek, David, 2011. "Governance and Prison Gangs," American Political Science Review, Cambridge University Press, vol. 105(4), pages 702-716, November.
    5. Golz, Michael & D'Amico, Daniel J., 2018. "Market concentration in the international drug trade," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 28-42.
    6. Ennio E. Piano, 2017. "Free riders: the economics and organization of outlaw motorcycle gangs," Public Choice, Springer, vol. 171(3), pages 283-301, June.
    7. Peter Leeson, 2013. "Gypsy law," Public Choice, Springer, vol. 155(3), pages 273-292, June.
    8. Peter Leeson, 2014. "Pirates, prisoners, and preliterates: anarchic context and the private enforcement of law," European Journal of Law and Economics, Springer, vol. 37(3), pages 365-379, June.
    9. Ennio E. Piano, 2018. "Outlaw and economics: Biker gangs and club goods," Rationality and Society, , vol. 30(3), pages 350-376, August.
    10. Sean Mulholland, 2013. "White supremacist groups and hate crime," Public Choice, Springer, vol. 157(1), pages 91-113, October.
    11. Escalante, Edwar E., 2020. "Night watchers and terrorists," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 116-131.
    12. Peter T. Leeson & David B. Skarbek, 2010. "Criminal constitutions," Global Crime, Taylor & Francis Journals, vol. 11(3), pages 279-297, August.
    13. Freire, Danilo, 2017. "Prison Gangs," SocArXiv kuqqx, Center for Open Science.
    14. Norgaard, Julia R. & Walbert, Harold J. & Hardy, R. August, 2018. "Shadow markets and hierarchies: comparing and modeling networks in the Dark Net," Journal of Institutional Economics, Cambridge University Press, vol. 14(5), pages 877-899, October.
    15. Rustam Romaniuc & Katherine Farrow & Lisette Ibanez & Alain Marciano, 2016. "The perils of government enforcement," Public Choice, Springer, vol. 166(1), pages 161-182, January.
    16. Leeson, Peter T., 2010. "Pirational choice: The economics of infamous pirate practices," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 497-510, December.
    17. Ken Yahagi, 2019. "Law enforcement with criminal organizations and endogenous collaboration," European Journal of Law and Economics, Springer, vol. 48(3), pages 351-363, December.
    18. Leonid Krasnozhon & John Levendis, 2018. "Weekend racer: cheating and self-governance in road racing," Economics of Governance, Springer, vol. 19(1), pages 75-90, February.
    19. Peter T Leeson, 2014. "Oracles," Rationality and Society, , vol. 26(2), pages 141-169, May.
    20. Peter T. Leeson & Douglas Bruce Rogers, 2012. "Organizing Crime," Supreme Court Economic Review, University of Chicago Press, vol. 20(1), pages 89-123.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:156:y:2013:i:1:p:95-103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.