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The governance institutions of a drug trafficking organization

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  • 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
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    References listed on IDEAS

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