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Organizing Crime

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  • Peter T. Leeson
  • Douglas Bruce Rogers

Abstract

This paper investigates the industrial organization of criminal enterprise. We argue that differences in contestability across criminal industries crucially shape how producers in those industries or ganize. In more contestable criminal industries, producers use organizational hierarchy to enforce collusion and preserve their returns. However, hierarchy creates scope for boss self-dealing and so is costly. In less contestable criminal industries, where producers' benefit from colluding is smaller, this cost exceeds organizational hierarchy's benefit. Here producers organize “flatly” instead. To examine our hypothesis we explore history's most infamous criminal organizations: the Sicilian Mafia and Caribbean pirates.

Suggested Citation

  • Peter T. Leeson & Douglas Bruce Rogers, 2012. "Organizing Crime," Supreme Court Economic Review, University of Chicago Press, vol. 20(1), pages 89-123.
    • Handle: RePEc:ucp:scerev:doi:10.1086/668520
    DOI: 10.1086/668520
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    Cited by:

    1. David Skarbek & Peng Wang, 2015. "Criminal rituals," Global Crime, Taylor & Francis Journals, vol. 16(4), pages 288-305, October.
    2. Ennio E. Piano, 2017. "Free riders: the economics and organization of outlaw motorcycle gangs," Public Choice, Springer, vol. 171(3), pages 283-301, June.
    3. S. Brock Blomberg & Ricardo Fernholz & John-Clark Levin, 2013. "Symposium - Terrorism and the Invisible Hook," Southern Economic Journal, Southern Economic Association, vol. 79(4), pages 849-863, April.
    4. S. Brock Blomberg & Ricardo Fernholz & John-Clark Levin, 2013. "Symposium - Terrorism and the Invisible Hook," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 849-863, April.
    5. James Kostelnik & David Skarbek, 2013. "The governance institutions of a drug trafficking organization," Public Choice, Springer, vol. 156(1), pages 95-103, July.
    6. Escalante, Edwar E., 2020. "Night watchers and terrorists," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 116-131.
    7. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, January.
    8. Armando Razo, 2021. "Network structure and performance of crony capitalism systems credible commitments without democratic institutions," Public Choice, Springer, vol. 189(1), pages 115-137, October.
    9. Peter T. Leeson & David B. Skarbek, 2010. "Criminal constitutions," Global Crime, Taylor & Francis Journals, vol. 11(3), pages 279-297, August.
    10. 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.
    11. 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.
    12. 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.

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