How Organized Crime Groups Interact: A Theory of Differential Cooperation

• In Event: Collaborations and Cooperation in Organized Crime

Abstract

Interactions between organized crime groups (OCGs) are under-explored in the literature. We study the determinants of cooperative interactions among OCGs operating in Merseyside (UK) using the complete crime dataset integrated with neighborhood-level socio-economic data and sentencing outcomes. We first address the puzzle of the coexistence of stable illegal markets and OCG violence: drug markets are contendible and OCGs resort on cooperation to mitigate risks of unbounded competition. Hence, the nexus between markets and violence is mediated by the structure of inter-OCGs cooperation (or lack thereof). We find that, net of urban and socio-demographic factors, violence is consequential to cooperation failure. Second, as in illegal markets contracts are not enforceable, incentives to collaborate and profit-sharing mechanisms are distorted. We posit that OCGs select partners and collaborations to balance risks and opportunities. Relative to the former aspect, we show that cooperation is differential as it is more likely to realize between groups characterized by asymmetric control of territory. Relative to the latter, OCGs are selective in the nature of interactions, with a positive relationship between expected returns (and associated risks) and cooperation intensity. Importantly, this mechanism complements network-based strategies used by OCGs for mitigation of risks involved with partner selection.

Authors

• Andrea Giovannetti, Australian Catholic University

• Paolo Campana, University of Cambridge