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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)

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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Bibliographic 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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Keywords: Law and economics; Property rights; Governance;

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References

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  1. Skaperdas, S. & Syropoulos, C., 1993. "Gangs as Primitive States," Papers 92-93-02, California Irvine - School of Social Sciences.
  2. Bester, Helmut & Wärneryd, Karl, 2006. "Conflict and the Social Contract," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 94, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  3. Nuno Garoupa, 1999. "Optimal law enforcement and criminal organization," Economics Working Papers 366, Department of Economics and Business, Universitat Pompeu Fabra.
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Cited by:
  1. Alessio D'Amato & Massimiliano Mazzanti & Francesco Nicolli, 2011. "Waste Sustainability, Environmental Management and Mafia: Analysing Geographical and Economic Dimensions," CEIS Research Paper 213, Tor Vergata University, CEIS, revised 24 Oct 2011.
  2. Yaron Zelekha & Ohad Bar-Efrat, 2011. "Crime, Terror and Corruption and Their Effect on Private Investment in Israel," Open Economies Review, Springer, vol. 22(4), pages 635-648, September.
  3. Giovanni Mastrobuoni & Eleonora Patacchini, 2010. "Understanding Organized Crime Networks: Evidence Based on Federal Bureau of Narcotics Secret Files on American Mafia," Carlo Alberto Notebooks 152, Collegio Carlo Alberto.
  4. Cathérine Müller & Joppe de Ree, 2009. "The Threat of Terrorism: The Perspective of a Policy-Maker," Economics of Security Working Paper Series 3, DIW Berlin, German Institute for Economic Research.
  5. Mastrobuoni, Giovanni, 2014. "The Value of Connections: Evidence from the Italian-American Mafia," IZA Discussion Papers 7925, Institute for the Study of Labor (IZA).

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