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On The Economics oF Organized Crime

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Author Info
Vimal Kumar () (Department of Economics, University of California-Irvine)
Stergios Skaperdas () (Department of Economics, University of California-Irvine)

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Abstract

The core function of organized crime is the selling of protection. Protection can be real, against third-party crime, or manufactured by the organized crime groups themselves. Mafias and gangs emerge in areas of weak state control, because of prohibition and geographic, ethnic, or social isolation. Although competition is considered good in economics, in the case of organized crime the predatory competition that is more likely to take place is harmful. The costs of organized crime include the resources expended on the activity, more ordinary productive and investment distortions, as well as other dynamic effects on occupational choice.

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Publisher Info
Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 070815.

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Length: 17 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:irv:wpaper:070815

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Related research
Keywords: Law and economics; Property rights; Governance;

Find related papers by JEL classification:
K00 - Law and Economics - - General - - - General (including Data Sources and Description)
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Garoupa, Nuno, 2007. "Optimal law enforcement and criminal organization," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 461-474, July. [Downloadable!] (restricted)
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  2. Syropoulos, C. & Skeperdas, S., 1993. "Gangs as Primitive States," Papers 10-93-25, Pennsylvania State - Department of Economics.
    Other versions:
  3. Helmut Bester & Karl Wärneryd, 2006. "Conflict and the Social Contract," Scandinavian Journal of Economics, Blackwell Publishing, vol. 108(2), pages 231-249, 07. [Downloadable!] (restricted)
    Other versions:
    • Helmut Bester & Karl Wärneryd, 2006. "Conflict and the Social Contract," Discussion Papers 94, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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