A Model of State-Crime Relations

• In Event: Studies of Organized Crime and Conflict Mini-Conference: Democracy under Assault: Theory and Evidence

Abstract

There are several ways for a state to respond to organized crime, ranging from a crackdown to keeping hands-off and even collusion. When does a state tolerate or even collaborate with organized crime groups, and when does it not? When does a state shift its response to criminal groups from one kind to another? To answer these questions, I construct a formal model that highlights the interdependence among the national government, organized crime groups (OCGs), and the community. I argue that the “illicit benefit" that ordinary citizens gain from the presence of OCGs is the key that governs the intensity of violence and the government’s response. The more illicit benefits citizens gain from criminal businesses and criminal groups’ social services, the more inclined OCGs will be to reduce violence; yet, this violence reduction may contribute to the perpetuation of the established collusion between the criminal group and the national government. I test this argument using the case of the mafia-infiltrated construction sector of Canada, where a crime-business connection is identified. Consistent with the theory, I find that violent crime decreases when the mafia-infiltrated economy is performing well, and this effect is only pronounced in the mafia-present areas.

Author

• Heesun Yoo, Academia Sinica