Organized Crime Group Takeovers in Drug Markets: A Model and Evidence from a Large UK Region

• In Event: Violence and Organized Crime

Abstract

Cities around the world feature stable drug markets operated by one or multiple organized crime groups (OCGs). Despite the geotemporal stability, urban drug markets exhibit a wide yet unexplained heterogeneity in the amount of violence recorded in their geographic surroundings. We develop a model of rational choice to argue that observed violence (or its absence) may be a consequence of how OCGs select which markets to target vis-à-vis the targeting choices of other (competing) groups. The core of our argument is that for rational OCGs, a trade-off exists between the profitability of a market and the expected costs of occupying such market. Our model predicts that cities where OCGs are more active show a more efficient market targeting, disperse control and lower average levels of violence, whereas cities with lower OCG activity may exhibit more complex structural patterns shaped by each market's profitability. Last, we show that the structure of drug markets and OCG-related violence of Merseyside, U.K. (1.4M residents) conforms to our model’s predictions in many dimensions. Particularly, areas with high volumes of drug dealing exhibit higher OCG turnover and greater levels of violence compared to medium-volume areas, suggesting a policy-relevant entrenchment effect for groups operating in the latter segment.

Authors

• Roberto Rozzi, Universita' degli Studi di Siena

• Andrea Giovannetti, Australian Catholic University

• Paolo Pin, Universita' degli Studi di Siena / Bocconi University

• Paolo Campana, University of Cambridge