Third-Party Policing Approaches against Organized Crime: an Evaluation of the Yakuza Exclusion Ordinances

Objective: Third-party policing (TPP) refers to police efforts to persuade or coerce third parties to take some responsibility for crime control and prevention. The Yakuza Exclusion Ordinances (YEOs) of Japan aim to combat organized crime syndicates—the yakuza—and to increase social welfare. Consistent with the principles of TPP, the YEOs prohibit third parties—non-yakuza individuals—from providing any benefit to the yakuza. We study both intended and unintended consequences of the YEOs by examining the YEOs’ effects on the number of yakuza members and on the revenues generated by communications fraud, which is the yakuza’s emergent income source. Methods: We use unique data on the yakuza and communications fraud. Using prefecture-level variation in the YEOs’ enactment dates, we apply a difference-indifferences approach, while allowing for heterogeneity in the YEOs’ effects by regional concentration levels of yakuza syndicates. Results: The YEOs decrease the number of yakuza members but increases the revenues generated by communications fraud. Moreover, the YEOs’ effects are smaller in regions with higher concentration levels of yakuza syndicates. These results are consistent with the argument that former yakuza members, who generally experience poor economic conditions and criminogenic conditions, tend to engage in widespread communications fraud. Conclusions: The YEOs are related to TPP strategies that rely on coercive techniques. Given this, our results support the effectiveness of TPP against organized crime but suggest that TPP can have unintended consequences on organized crime by increasing the level of income-generating crime. Our results indicate the importance of rehabilitation assistance for former members of criminal organizations.