The Economics of Organised Crime

This book provides an economic analysis of activities of the organised crime sector: its origins, its internal organisation, its market behaviour and the policies which can be employed against it. It also offers a formal analysis of the circumstances under which organised crime is more likely to become a threat to civil society. This is the first book to use economic theory in the analysis of all the different aspects of organised crime: the origins, the internal organisation, market behaviour and deterrence policies. The theory of rent-seeking is adopted to help understand the origin of criminal organisations from a state of anarchy, while modern industrial organisation theory is used to explain the design of internal rules in the organised crime sector. The market behaviour of organised crime is analysed taking into account its double nature of competitive firm and of monopolist on rule-making. Finally, the 'crime and economics' approach is applied to the analysis of corruption that occurs when the organised crime sector and the government collude to exploit their monopoly on rule-making. This book provides a careful balance between theoretical and institutional or empirical contributions. Each chapter outlines the normative results of the analysis in order to design more sophisticated deterrence policies.