Gov-arrrgh-nance: Jolly Rogers and Dodgy Rulers

Olaf de Groot () and Anja Shortland ()

No 39, Economics of Security Working Paper Series from DIW Berlin, German Institute for Economic Research

Abstract: In this paper, we argue that the effect of governance on the emergence of crimes of different levels of sophistication is highly non-linear. State failure, anarchy and a lack of infrastructure are not conducive to establishing any business, including illicit enterprises. At the bottom of the spectrum, therefore, both legal business and criminal gangs benefit from improved governance. With further improvements in governance criminal activities decline. We find strong and consistent support for this hypothesis using the International Maritime Bureau's dataset on piracy. Piracy is reported by ship-owners, giving a unique insight into crime in badly governed countries which were systematically excluded from previous analyses. We show that profitable forms of piracy flourish where on the one hand there is stability and infrastructure, but on the other hand the state does not have the capacity to intervene and/or bureaucrats can be bribed to turn a blind eye. For minor acts of theft from ships the pattern is quadratic: piracy first rises and then falls as governance improves.

Keywords: Piracy; illegal behaviour; law enforcement; legal institutions (search for similar items in EconPapers)
JEL-codes: K42 P48 (search for similar items in EconPapers)
Pages: 37 p.
Date: 2010
New Economics Papers: this item is included in nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_ ... /diw_econsec0039.pdf (application/pdf)

Related works:
Working Paper: Gov-arrrgh-nance: Jolly Rogers and Dodgy Rulers (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diweos:diweos39

Access Statistics for this paper

More papers in Economics of Security Working Paper Series from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().