Gangs, or Clans? A Transaction Cost Lens for Chicago’s Black Street Gangs

• In Event: Cycles of Impact: From Reporting to Response in Violence & Justice

Abstract

Consistent definition of “gang” or “street gang” has often eluded both policymakers and researchers (Ball and Curry, 2005). We argue that street gangs can largely be understood as clans, or bureaucratic profit seeking firms defined in part by an emphasis on shared values and traditions. Transaction costs economics suggests that firms exists largely when frictions make markets relatively inefficient market coordinating mechanisms. Clans emerge as governance mechanisms when neither markets nor firms clear efficiently, particularly when information costs make performance evaluation difficult, using shared values to overcome goal incongruence, bureaucratic frictions and opportunism (Ouchi, 1980).

We examine Black street gangs in Chicago in the late 20th century. For much of the 20th century, Chicago’s Black street gangs were highly structured, hierarchical syndicates with tight corporate boards and vast networks that controlled other the midwestern, southern, and eastern US.  We examine the scale, scope, and boundaries of Black Chicago gangs during this period, we show not just that these organizations can be understood as organized profit seeking bureaucracies, but clans, emphasizing shared values to overcome market frictions inherent in production and sale within illicit markets.  We elucidate this argument using archival organizational data, user written and police drawn maps of gang territory, Reddit scrapes, and interviews with several formal Chicago gang members.

Author

• Jason A Coupet, Georgia State University
  Presenting Author