IDEAS home Printed from https://ideas.repec.org/a/kap/ejlwec/v46y2018i3d10.1007_s10657-018-9600-0.html
   My bibliography  Save this article

Welfare effects of forming a criminal organization

Author

Listed:
  • Ken Yahagi

    (Waseda University)

Abstract

This paper develops a simple model to examine the economic consequences of two different criminal market structures in the private protection and extortion industry: (1) horizontal (decentralized) governance and market structure and (2) hierarchical (centralized) governance and market structure with a criminal organization. Forming a criminal organization produces positive or negative effects on its members and social efficiency. These results depend on the potential competitiveness among criminals and the ability of a criminal organization’s boss to target more valuable extortion victims.

Suggested Citation

  • Ken Yahagi, 2018. "Welfare effects of forming a criminal organization," European Journal of Law and Economics, Springer, vol. 46(3), pages 359-375, December.
    • Handle: RePEc:kap:ejlwec:v:46:y:2018:i:3:d:10.1007_s10657-018-9600-0
    DOI: 10.1007/s10657-018-9600-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10657-018-9600-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10657-018-9600-0?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. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Avinash Dixit, 2008. "Strategic Behavior in Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 431-438, Springer.
    3. Shmuel Nitzan, 2008. "Collective Rent Dissipation," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 309-321, Springer.
    4. Gil S. Epstein & Yosef Mealem, 2012. "Governing Interest Groups and Rent Dissipation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(3), pages 423-440, June.
    5. 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.
    6. Keith Hartley & Todd Sandler (ed.), 2007. "Handbook of Defense Economics," Handbook of Defense Economics, Elsevier, edition 1, volume 2, number 1.
    7. Andrea Mario Lavezzi, 2008. "Economic structure and vulnerability to organised crime: Evidence from Sicily," Global Crime, Taylor & Francis Journals, vol. 9(3), pages 198-220, August.
    8. Skarbek, David, 2012. "Prison gangs, norms, and organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 96-109.
    9. Peter T. Leeson & David B. Skarbek, 2010. "Criminal constitutions," Global Crime, Taylor & Francis Journals, vol. 11(3), pages 279-297, August.
    10. Stergios Skaperdas, 2001. "The political economy of organized crime: providing protection when the state does not," Economics of Governance, Springer, vol. 2(3), pages 173-202, November.
    11. Grossman, Herschel I., 2002. ""Make us a king": anarchy, predation, and the state," European Journal of Political Economy, Elsevier, vol. 18(1), pages 31-46, March.
    12. Garoupa, Nuno, 2000. "The Economics of Organized Crime and Optimal Law Enforcement," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 278-288, April.
    13. Dimico, Arcangelo & Isopi, Alessia & Olsson, Ola, 2017. "Origins of the Sicilian Mafia: The Market for Lemons," The Journal of Economic History, Cambridge University Press, vol. 77(4), pages 1083-1115, December.
    14. repec:wvu:wpaper:09-09 is not listed on IDEAS
    15. Simon Rottenberg, 1973. "The Economics of Crime and Punishment," Books, American Enterprise Institute, number 920506, September.
    16. Buonanno, Paolo & Prarolo, Giovanni & Vanin, Paolo, 2016. "Organized crime and electoral outcomes. Evidence from Sicily at the turn of the XXI century," European Journal of Political Economy, Elsevier, vol. 41(C), pages 61-74.
    17. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    18. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    19. Paolo Pinotti, 2015. "The Economic Costs of Organised Crime: Evidence from Southern Italy," Economic Journal, Royal Economic Society, vol. 125(586), pages 203-232, August.
    20. 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.
    21. Olson, Mancur, 1993. "Dictatorship, Democracy, and Development," American Political Science Review, Cambridge University Press, vol. 87(3), pages 567-576, September.
    22. 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. Giovanni B. Ramello & Alain Marciano, 2018. "Cesare Beccaria: back to the future of law and economics," European Journal of Law and Economics, Springer, vol. 46(3), pages 271-274, December.
    2. Ken Yahagi & Susumu Cato, 2023. "Strategic crackdown on organized crime by local governments," Economics of Governance, Springer, vol. 24(2), pages 237-257, June.
    3. 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.
    4. Dr. Fauzia Mohamed* & Mussa Ali Mussa, 2019. "Emergence of Youth Criminal Groups Popularly Known as Panya Road and Ubaya Ubaya in Tanzania: The Case of Dar es Salaam City and Zanzibar Town," Research Journal of Education, Academic Research Publishing Group, vol. 5(7), pages 119-127, 07-2019.
    5. Ken Yahagi, 2022. "Regulation on coexisting legal and illegal markets with quality differentiation," European Journal of Law and Economics, Springer, vol. 53(2), pages 235-259, April.

    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. 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.
    2. 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.
    3. David Skarbek, 2024. "The political economy of criminal governance," Public Choice, Springer, vol. 200(1), pages 1-24, July.
    4. Skarbek, David, 2011. "Governance and Prison Gangs," American Political Science Review, Cambridge University Press, vol. 105(4), pages 702-716, November.
    5. Skarbek, David, 2012. "Prison gangs, norms, and organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 96-109.
    6. Peter T. Leeson & David B. Skarbek, 2010. "Criminal constitutions," Global Crime, Taylor & Francis Journals, vol. 11(3), pages 279-297, August.
    7. 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.
    8. Peter T. Leeson & Douglas Bruce Rogers, 2012. "Organizing Crime," Supreme Court Economic Review, University of Chicago Press, vol. 20(1), pages 89-123.
    9. Jefferson DP Bertolai & Luiz GDS Scorzafave, 2021. "Property rights’ emergence in illicit drug markets," Rationality and Society, , vol. 33(1), pages 52-105, February.
    10. Nicholas A. Curott & Alexander Fink, 2012. "Bandit Heroes: Social, Mythical, or Rational?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 71(2), pages 470-497, April.
    11. John R. Boyce & David M. Bruner, 2009. "Good Fences Make Good Neighbors: Endogenous Property Rights in a Game of Conflict," Working Papers 09-05, Department of Economics, Appalachian State University.
    12. 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.
    13. David Skarbek & Peng Wang, 2015. "Criminal rituals," Global Crime, Taylor & Francis Journals, vol. 16(4), pages 288-305, October.
    14. 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.
    15. Daniel J. D'Amico, 2017. "The Social Provision of Punishment and Incarceration," American Journal of Economics and Sociology, Wiley Blackwell, vol. 76(5), pages 1107-1132, November.
    16. Ennio E. Piano, 2017. "Free riders: the economics and organization of outlaw motorcycle gangs," Public Choice, Springer, vol. 171(3), pages 283-301, June.
    17. Balletta, Luigi & Lavezzi, Andrea Mario, 2023. "The economics of extortion: Theory and the case of the Sicilian Mafia," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1109-1141.
    18. David Skarbek, 2010. "Putting the "Con" into Constitutions: The Economics of Prison Gangs," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 26(2), pages 183-211.
    19. Soeren C. Schwuchow, 2023. "Organized crime as a link between inequality and corruption," European Journal of Law and Economics, Springer, vol. 55(3), pages 469-509, June.
    20. Paolo Pinotti, 2012. "The economic costs of organized crime: evidence from southern Italy," Temi di discussione (Economic working papers) 868, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Conflict; Organized crime; Rent-seeking; Crime; Extortion;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    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:ejlwec:v:46:y:2018:i:3:d:10.1007_s10657-018-9600-0. 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.