On The Economics oF Organized Crime

Vimal Kumar () and Stergios Skaperdas

No 70815, Working Papers from University of California-Irvine, Department of Economics

Abstract: The core function of organized crime is the selling of protection. Protection can be real, against third-party crime, or manufactured by the organized crime groups themselves. Mafias and gangs emerge in areas of weak state control, because of prohibition and geographic, ethnic, or social isolation. Although competition is considered good in economics, in the case of organized crime the predatory competition that is more likely to take place is harmful. The costs of organized crime include the resources expended on the activity, more ordinary productive and investment distortions, as well as other dynamic effects on occupational choice.

Keywords: Law and economics; Property rights; Governance (search for similar items in EconPapers)
JEL-codes: K00 K42 L10 L22 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law and nep-soc
Date: 2008-02
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Persistent link: http://EconPapers.repec.org/RePEc:irv:wpaper:070815

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