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Plunder & Protection Inc

Author

Listed:
  • HALVOR MEHLUM

    (Frisch Centre, University of Oslo halvor.mehlum@econ.uio.no)

  • KARL OVE MOENE

    (Department of Economics, University of Oslo)

  • RAGNAR TORVIK

    (Department of Economics, Norwegian University of Science and Technology)

Abstract

When the state fails to supply basic security and protection of property, violent entrepreneurs not only seize the opportunity of plundering, but some also enter the protection business and provide protection against plunderers. This uncoordinated division of labor is advantageous for the entire group of violent entrepreneurs. Hence, in weak states a situation may arise where a large number of violent entrepreneurs can operate side by side as plunderers and protectors squeezing the producers from both sides. The problem reached new levels at the end of the Cold War. As military forces were demobilized without civilian jobs to go to, many countries got an oversupply of qualified violent people for crime, warfare, and private protection. In this `market for extortion' the entry of new violent entrepreneurs enhances the profitability of them all. The supply of violence creates its own demand - an externality of violence that is detrimental to the development in poor countries.

Suggested Citation

  • Halvor Mehlum & Karl Ove Moene & Ragnar Torvik, 2002. "Plunder & Protection Inc," Journal of Peace Research, Peace Research Institute Oslo, vol. 39(4), pages 447-459, July.
    • Handle: RePEc:sae:joupea:v:39:y:2002:i:4:p:447-459
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    Citations

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    Cited by:

    1. Rachel Sabates-Wheeler & Philip Verwimp, 2014. "Extortion with Protection: Understanding the effect of rebel taxation on civilian welfare in Burundi," Working Papers CEB 14-004, ULB -- Universite Libre de Bruxelles.
    2. Jean-François Maystadt & Giacomo De Luca & Petros G. Sekeris & John Ulimwengu, 2014. "Mineral resources and conflicts in DRC: a case of ecological fallacy?," Oxford Economic Papers, Oxford University Press, vol. 66(3), pages 721-749.
    3. Andrew T. Young, 2016. "What does it take for a roving bandit settle down? Theory and an illustrative history of the Visigoths," Public Choice, Springer, vol. 168(1), pages 75-102, July.
    4. Russell S. Sobel & Brian J. Osoba, 2009. "Youth Gangs as Pseudo-Governments Implications for Violent Crime," Southern Economic Journal, Southern Economic Association, vol. 75(4), pages 996-1018, April.
    5. Benjamin A. Okonofua, 2016. "The Niger Delta Amnesty Program," SAGE Open, , vol. 6(2), pages 21582440166, June.
    6. Benedikt Korf, 2006. "Functions of violence revisited: greed, pride and grievance in Sri Lanka’s civil war," Progress in Development Studies, , vol. 6(2), pages 109-122, April.
    7. 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.
    8. Lambach, Daniel, 2007. "Oligopolies of Violence in Post-Conflict Societies," GIGA Working Papers 62, GIGA German Institute of Global and Area Studies.
    9. Milante, Gary, 2007. "A kleptocrat's survival guide : autocratic longevity in the face of civil conflict," Policy Research Working Paper Series 4186, The World Bank.
    10. Gvozdeva, Margarita (Гвоздева, Маргарита) & Kazakova, M.V. (Казакова, М.В.) & Kiblitskaya, T.R. (Киблицкая, Т.Р.) & Lyubimov, I.L. (Любимов, И.Л.) & Nesterova, K.V. (Нестерова, К.В.), 2016. "Various Aspects of Natural Resource Wealth Effect on Economic Growth [Различные Аспекты Влияния Богатства Природными Ресурсами На Экономический Рост]," Working Papers 2045, Russian Presidential Academy of National Economy and Public Administration.
    11. Luis Raúl Rodríguez-Reyes, 2018. "A Model of the Indirect Effect of Crime on the Demand for Money," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 13(4), pages 571-584, Octubre-D.
    12. Mehlum, Halvor & Moene, Karl O. & Torvik, Ragnar, 2003. "Parasites," Memorandum 16/2003, Oslo University, Department of Economics.
    13. Murshed, S. Mansoob, 2004. "When Does Natural Resource Abundance Lead to a Resource Curse?," Discussion Papers 24137, International Institute for Environment and Development, Environmental Economics Programme.
    14. Kløve, Eva & Mehlum, Halvor, 2017. "The Firm and the self-enforcing dynamics of crime and protection," Memorandum 06/2017, Oslo University, Department of Economics.
    15. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    16. Thomas G. Weiss, 2016. "Ethical Quandaries in War Zones, When Mass Atrocity Prevention Fails," Global Policy, London School of Economics and Political Science, vol. 7(2), pages 135-145, May.

    More about this item

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Political Economy and Comparative Economic Systems

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