Organised Chaos: Criminal Incompetence in Drug Markets

• In Event: Criminal Incompetence: Why Criminal Organizations and Markets Work so Poorly

Abstract

Every year, thousands of tons of cocaine are produced and sold around the globe. From production to distribution, the supply chain is populated by a variety of criminal actors including armed groups, gangs, and mafias. Brokers facilitate transatlantic deals, professional transporters move the product, and money launderers channel profits back into the legal economy. Drawing on confidential judicial and police files of a series of major investigations into drug trafficking operations between Latin America and Europe, this paper investigates efficiencies and inefficiencies of drug markets. On the one hand, incompetence seems pervasive. Looking at individual transactions, the picture is one of mis-coordination, poor decision-making and irresponsible financial management, resulting in constant conflict. In the absence of contract enforcement and formal dispute-settlement mechanisms, the impact on business should be detrimental. On the other hand, the research reveals a functioning market that, despite hiccups and conflict, increases in size every year. If criminals are generally “incompetent”, they still seem to be competent enough for the business to flourish. Investigating why and how is the main contribution of this paper.

Author

• Zora Lea Hauser, University of Oxford