Organised Crime and the Economy: a Framework for Policy Prescriptions

Abstract

In this paper we discuss policies to combat organised crime from the perspective of economic analysis. We introduce concepts such as supply and demand for Mafia and the implied notion of equilibrium to build a framework to classify the contexts in which organised crime interferes with the economy. We then use this framework to discuss policy interventions, distinguishing between policies implemented by the State and mobilisation of civil society. We show that using the economic approach helps understand the aspect of persistence of criminal organisations and identify vicious circles of different nature. The broad spectrum of State policies identified includes norms on competition, on the efficiency of the State, on decriminalisation and on market deregulation. Finally, in discussing the mobilisation of civil society, we highlight the problem of coordination, an aspect often overlooked in the literature.