The Economics of Extortion: Theory and Evidence on the Sicilian Mafia

By Luigi Balletta and Andrea Lavezzi 

This paper studies extortion of firms operating in legal sectors by a profit-maximizing criminal organization. We develop a simple principal-agent model under asymmetric information to find the Mafia-optimal extortion as a function of firms' observable characteristics, namely size and sector. We test the predictions of the model on a unique dataset on extortion in Sicily, the Italian region where the most powerful criminal organization, the Mafia, operates. In line with our theoretical model, our empirical findings show that extortion is strongly concave in firm's size and highly regressive. The percentage of profits appropriated by Mafia ranges from 40% for small firms to 2% for large firms. We derive some implications of these findings on market structure and economic development.

Pisa, Italy: Dipartimento di Economia e Management – Università di Pisa, 2019. 47p.

By Yvon Dandurand, Lucia Bird Ruiz Benitez de Lugo, Kingsley Madueke and Oumar Zombre  

  State-centric approaches to building resilience to organised crime must be complemented with community-based, context-specific responses that challenge organised crime and violence at a local level. Local communities are key elements of the necessary response to the destabilising impacts of organised crime in conflict as well as post-conflict settings. There remains a gap in stakeholder understanding of the elements of community resilience to organised crime, particularly in unstable settings. This report starts to address this gap, by analysing key drivers of community resilience – identified as social capital, community capacity, the role of women, economic capital and infrastructure – in four communities in Nigeria, Guinea-Bissau and Burkina Faso.   

Institute for Security Studies,  2022. 44p.

By Deborah Manzi

Criminal organizations operate in complex changing environments. Being flexible and dynamic allows criminal networks not only to exploit new illicit opportunities but also to react to law enforcement attempts at disruption, enhancing the persistence of these networks over time. Most studies investigating network disruption have examined organizational structures before and after the arrests of some actors but have disregarded groups’ adaptation strategies. The present study investigated the resilience of drug trafficking organizations (DTOs) to law enforcement attempts at disruption, focusing on three main aspects: the ability to endure disruption, react quickly and efficiently to threats, and keep primary functions unaltered. The analysis relied on an agent-based model (ABM) that simulates drug trafficking and dealing activities by organized criminal groups and their reactions to law enforcement attempts at disruption. The simulation relied on information retrieved from a detailed court order against a large-scale Italian DTO and from the literature. The results demonstrated that law enforcement interventions are often critical events for DTOs, with high rates of disruption. However, surviving DTOs always displayed a high level of resilience, with effective strategies in place to react to threatening events and to continue drug trafficking and dealing.

Milan: Università Cattolica del Sacro Cuore, 2023. 297p.

ByScott Duxbury and Dana L. Haynie

Physical, technological, and social networks are often at risk of intentional attack. Despite the wide-spanning importance of network vulnerability, very little is known about how criminal networks respond to attacks or whether intentional attacks affect criminal activity in the long-run. To assess criminal network responsiveness, we designed an empirically-grounded agent-based simulation using population-level network data on 16,847 illicit drug exchanges between 7,295 users of an active darknet drug market and statistical methods for simulation analysis. We consider three attack strategies: targeted attacks that delete structurally integral vertices, weak link attacks that delete large numbers of weakly connected vertices, and signal attacks that saturate the network with noisy signals. Results reveal that, while targeted attacks are effective when conducted at a large-scale, weak link and signal attacks deter more potential drug transactions and buyers when only a small portion of the network is attacked. We also find that intentional attacks affect network behavior. When networks are attacked, actors grow more cautious about forging ties, connecting less frequently and only to trustworthy alters. Operating in tandem, these two processes undermine long-term network robustness and increase network vulnerability to future attacks.

  PLoS ONE 15(9):  2020.  

By Dušan Stanković

This research focuses on the six European Union (EU) accession candidates from the Western Balkans (WB6): Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. Its objectives are to map the phenomenon and main characteristics of organized crime groups (OCGs) in the region. The analysis is based on the research of both primary and secondary data, using expert interviews, police announcements, official statistics, national SOCTA documents, etc. The study finds that OCGs from some countries such as Albania, Montenegro and Serbia developed largely international networks with 30 and more members. These OCGs represent the main actors and leaders of organized crime (OC) in the region. Other OCGs which have fewer members (from 3-4 to around 15), perform mainly on a national level or as facilitators of bigger OCGs. Male gender is the most common (in about 90% of the cases). Women are engaged in logistic activities, although there are individual cases where they are higher in the criminal group hierarchy. The age of the members can vary between 20 and 50 years old, depending on the activity and territory. The estimated average is around 35, but there are cases of members aged 65 and over. The nationalities and ethnicities of the OCGs follow the patterns of their regions, having solid bonds with their families and traditions. However, differences in background do not stop OCGs to cooperate and make criminal networks. The main criminal activities performed by the OCGs in WB6 are the illicit drug trafficking and migrant smuggling. At the same time, illegal firearms and explosives trafficking and money laundering serve as facilitators of the major activities. Less frequent crime types are organized property crimes, where smuggling of goods is the most prominent activity. Trafficking in human beings has recently been much-evoked in public, mainly by large migration going through the Balkans and creating opportunities for illegal migration and human trafficking. Still, it seems like the authorities currently do not identify big OCGs in the trafficking of human beings. In addition, cybercrime represents an incremental trend, but there also seem to be no prominent OCGs which perform it as a core activity.  

Belgrade, Serbia:  Belgrade Centre for Security Policy (BCSP), 2022. 48p.

By Alina Rocha Menocal

  This paper argues that political settlements analysis and an understanding of elite bargains need to incorporate a deeper and more systematic exploration of serious organised crime (SOC), since this affects critical elements related to the nature and quality of elite bargains and political settlements. In particular, the paper examines how SOC affects these issues – from the elites that constitute a bargain or settlement, to violence and stability, to ‘stateness’, or the extent to which a state is anchored in society, state capacity and political will, to legitimacy and electoral politics. The paper draws on insights from a rich body of research on organised crime and its impacts on conflict, violence, governance and development to articulate how SOC can be more thoroughly integrated into research focused on political settlements and/or elite bargains to enhance its analytical depth, quality and accuracy. The paper also outlines lessons and implications that may guide further reflection in conflict and development circles on the nexus between organised crime, elite bargains and political settlements from a thinking and working politically perspective.  

SOC ACE Research Paper No. 15. Birmingham, UK: University of Birmingham. 2022. 41p.

By Tomáš Diviák 

Objectives: Criminal networks tend to recover after a disruption, and this recovery may trigger negative unintended consequences by strengthening network cohesion. This study uses a real-world street gang network as a basis for simulating the effect of disruption and subsequent recovery on network structure.

Methods: This study utilises cohesion and centrality measures to describe the network and to simulate nine network disruptions. Stationary stochastic actor-oriented models are used to identify relational mechanisms in this network and subsequently to simulate network recovery in five scenarios.

Results: Removing the most central and the highest-ranking actors have the largest immediate impact on the network. In the long-term recovery simulation, networks become more compact (substantially so when increasing triadic closure), while the structure disintegrates when preferential attachment decreases.

Conclusion: These results indicate that the mechanisms driving network recovery are more important than the immediate impact of disruption due to network recovery.

Journal of Experimental Criminology (2023)

By Robin Cartwright and Nicholas Atampugre

The Niger Delta is a global focal point for oil crime that has devastated Nigeria's environment, land, air and water.

Niger Delta oil crime is one of the most serious natural resource crimes globally, with the systematic theft, sale and illegal refining of up to 20% of Nigeria’s oil output. Illegal bunkering and artisanal refining have increased exponentially over the past decade. This paper draws on qualitative interviews with Niger Deltan citizens, and government and community experts, to examine the impact on society. While state security forces continue to treat the crime with ‘extreme prejudice’ – destroying illegal camps and transportation – Niger Deltan citizens have normalised it, justifying it as an economic, energy and employment necessity despite its health and environmental toll.

Enact Africa, 2020. 28p.

By Christopher Hernandez-Roy and Rubi Bledsoe

A journalist recently made an apt joke about living under President Daniel Ortega’s dictatorship: “Hi, I am from Nicaragua, and I represent your future. I am living what you will be experiencing soon enough: harassment, persecution, and threats to your lives and imprisonment,” he said to a group of Northern Triangle colleagues by way of introduction. This anecdote recalls Charles Dickens’ Ghost of Christmas Yet to Come in his 1843 novella A Christmas Tale, where the ghost portends the demise of Ebenezer Scrooge. In this context, it portends the death of democracy in the Northern Triangle, and the dire effects of democratic backsliding. Up until very recently, the conditions in Nicaragua were starkly different from its neighbors. The Ortega regime is a dictatorship that persecutes and detains opponents at will and with complete impunity. Nicaragua’s Northern Triangle neighbors have been democracies, even if imperfect ones. However, in 2019, the election of Nayib Bukele as president of El Salvador marked the beginning of a stark shift in the anti-crime strategy of the country and a turn toward authoritarian tendencies. The new leader opted to suspend constitutional guarantees and engage in mass incarceration in order to fight crime and gang violence, setting off alarm bells across the region, as concerns grew over democratic backsliding. The self-identified “coolest dictator in the world,” used his background in marketing and social media branding to propel an extreme version of mano dura, or “zero tolerance,” to fight crime. Three years later, Honduras and other countries have taken notice of the appeal of these tactics and are now replicating it, or considering it, in whole or in part. This is a slippery slope for the region and a precedent that poses a great danger to the hemisphere’s democracies.   

Washington, DC: Center for Strategic and International Studies, 2023. 12p.

By Tom Wainwright

How does a budding cartel boss succeed (and survive) in the $300 billion illegal drug business? By learning from the best, of course. From creating brand value to fine-tuning customer service, the folks running cartels have been attentive students of the strategy and tactics used by corporations such as Walmart, McDonald’s, and Coca-Cola.

And what can government learn to combat this scourge? By analyzing the cartels as companies, law enforcers might better understand how they work—and stop throwing away $100 billion a year in a futile effort to win the “war” against this global, highly organized business.

Your intrepid guide to the most exotic and brutal industry on earth is Tom Wainwright. Picking his way through Andean cocaine fields, Central American prisons, Colorado pot shops, and the online drug dens of the Dark Web, Wainwright provides a fresh, innovative look into the drug trade and its 250 million customers.

The cast of characters includes “Bin Laden,” the Bolivian coca guide; “Old Lin,” the Salvadoran gang leader; “Starboy,” the millionaire New Zealand pill maker; and a cozy Mexican grandmother who cooks blueberry pancakes while plotting murder. Along with presidents, cops, and teenage hitmen, they explain such matters as the business purpose for head-to-toe tattoos, how gangs decide whether to compete or collude, and why cartels care a surprising amount about corporate social responsibility.

More than just an investigation of how drug cartels do business, Narconomics is also a blueprint for how to defeat them

NY. Public Affairs. 2016. 288p.

By Ioan Grillo

The world has watched stunned at the bloodshed in Mexico. Thirty thousand murdered since 2006; police chiefs shot within hours of taking office; mass graves comparable to those of civil wars; car bombs shattering storefronts; headless corpses heaped in town squares. The United States throws Black Hawk helicopters and drug agents at the problem. But in secret, Washington is confused and divided about what to do. "Who are these mysterious figures tearing Mexico apart?" they wonder.

London: Bloomsbury, 2017. 250p.

By Jerry Langton

A frightening look at Mexico's new power elite-the Mexican drug cartels The members of Mexico's drug cartels are among the criminal underworld's most ambitious and ruthless entrepreneurs. Supplanting the once dominant Colombian cartels, the Mexican drug cartels are now the major distributor of heroin and cocaine to the U.S. and Canada. Not only have their drugs crossed north of the border, so have the cartels (in 2009, 230 active Mexican drug cartels have been reported in U.S. cities). In Gangland, bestselling author Jerry Langton details their frightening stranglehold on the economy and daily life of Mexico today-and what it portends for the future of Mexico and its neighbours. Offering a firsthand look from members of law enforcement, politicians, journalists, and people involved in the drug trade in Mexico and Canada, Gangland sheds a harsh light on the multibillion dollar industry that is the drug trade, the territorial wars, and the on-the-street reality for the United States, with the importation of narco-terrorists. With the unstinting realism and keen analysis that have made him an internationally respected journalist, Langton offers the bleak prospects of what a collapsed government in Mexico might lead to-a new Mexican warlord state not unlike Somalia.

NY. Harper Collins. 2011. 288p.

By Michael G. Findley, Daniel L. Nielson & J. C. Sharman

Every year a staggering number of unidentified shell corporations succeed in hiding perpetrators of terrorist financing, corruption and illegal arms trades, but the degree to which firms flout global identification standards remains unknown. Adopting a unique, experimental methodology, Global Shell Games attempts to unveil the sordid world of anonymous shell corporations. Posing as twenty-one different international consultants, the authors approached nearly 4,000 services in over 180 countries to discover just how easy it is to form an untraceable company. Combining rigorous quantitative analysis, qualitative investigation of responses and lurid news reports, this book makes a significant research contribution to compliance with international law and international crime and terrorism whilst offering a novel, new approach to the field of political science research.

Cambridge, UK; New York: Cambridge University Press, 2014. 250p.

By Joseph D. Serio

In the 1990s, the so-called Russian mafia dominated newspaper headlines, political analysis, and academic articles around the world. It was the new scourge, a threat so massive that it was believed to hold the Russian economy hostage. Former FBI Director Louis Freeh announced that the Russian mafia was a significant threat to the national security of the United States.

Before the end of the decade, Director Freeh reversed himself, saying that in reality the magnitude of the danger from the Russian mafia had been overestimated. Heading into the new millennium, the international hue and cry about gangsters from the former Soviet Union subsided dramatically, particularly after the terrorist attacks of September 11. Al-Qaeda shifted the spotlight from organized crime to terrorism and U.S. homeland security. Has the Russian mafia been eradicated or has it simply fallen below the radar?

Countless books and articles have reported on the Russian mafia in breathless terms bordering on hysteria. Casting a broad net, Serio brings a different, more analytical approach to his exploration of the subject. In Investigating the Russian Mafia, Part I begins by asking a series of basic questions: What did the Soviets understand 'mafia' to mean? Was this a Russian phenomenon or more broadly-based, multi-ethnic groups? How did the media influence the perception of the Russian mafia? What does a close examination of the official statistics reveal about the nature of crime groups in the former Soviet Union?

In Part II, Serio discusses an overview of attitudes and practices of the criminal world, business, and policing, among others, in Russian history. He demonstrates that many of the forces at work in the 1990s did not originate in the Communist era or arise because of the collapse of the USSR. Part III presents a discussion of the crime groups that developed in the post-Soviet era, the challenges that faced the business world, and the law enforcement response.

Durham, NC: Carolina Academic Press, 2008. 324p.

By Anthony DeStefano

He was the last of his kind-an old-world mob boss steeped in omert , the mob code of silence. While his arrogant friend John Gotti was being secretly recorded by the FBI, Joseph Massino, head of the Bonanno family, quietly became known as "The Ear" by ordering his men to point to their ear instead of saying his name out loud.

For more than twenty years Massino ran what was called the largest criminal network in the U.S., employing over 250 made men and untold numbers of associates. The Bonanno family was responsible for over 30 murders, even killing a dozen of its own members to settle scores. Massino ran a tight organization, obsessively checking his social club for bugging devices, frustrating FBI surveillance. But in the end Massino would be brought down from the inside, by the underboss who was not only his closest and most trusted friend—but a member of his blood family.

Based on exclusive interviews with Massino's family and closest associates, as well as law enforcement officials and confidential sources, The Last Godfather is an epic inside story from Pulitzer Prizewinning reporter Anthony DeStefano.

New York: Kensington Publishing, 2006. 351p.

By Grace Kena and Jennifer L. Truman 

This report describes trends and patterns in fatal and nonfatal firearm violence from 1993 to 2018 and for the more recent period of 2014 to 2018. The report includes data on the type of firearm; location of the incident; victim and offender demographic characteristics and relationship; type of violence, injury, and treatment; police notification; and victims’ self-protective behaviors.

Washington, DC: U.S. Bureau of Crime Statistics, 2022. 26p.

By Chris A Rees . Michael C Monuteaux , Isabella Steidley, Rebekah Mannix , Lois K Lee , Jefferson T Barrett , and Eric W Fleegler

Firearm fatality rates in the United States have reached a 28-year high. Describing the evolution of firearm fatality rates across intents, demographics, and geography over time may highlight high-risk groups and inform interventions for firearm injury prevention.

Objective: To understand variations in rates of firearm fatalities stratified by intent, demographics, and geography in the US.

Design, setting, and participants: This cross-sectional study analyzed firearm fatalities in the US from 1990 to 2021 using data from the Centers for Disease Control and Prevention. Heat maps, maximum and mean fatality rate graphs, and choropleth maps of county-level rates were created to examine trends in firearm fatality rates by intent over time by age, sex, race, ethnicity, and urbanicity of individuals who died from firearms. Data were analyzed from December 2018 through September 2022.

Main outcomes and measures: Rates of firearm fatalities by age, sex, race, ethnicity, urbanicity, and county of individuals killed stratified by specific intent (suicide or homicide) per 100 000 persons per year.

Results: There were a total of 1 110 421 firearm fatalities from 1990 to 2021 (952 984 among males [85.8%] and 157 165 among females [14.2%]; 286 075 among Black non-Hispanic individuals [25.8%], 115 616 among Hispanic individuals [10.4%], and 672 132 among White non-Hispanic individuals [60.5%]). All-intents total firearm fatality rates per 100 000 persons declined to a low of 10.1 fatalities in 2004, then increased to 14.7 fatalities (45.5% increase) by 2021. From 2014 to 2021, male and female firearm homicide rates per 100 000 persons per year increased from 5.9 to 10.9 fatalities (84.7% increase) and 1.1 to 2.0 fatalities (87.0% increase), respectively. Firearm suicide rates were highest among White non-Hispanic men aged 80 to 84 years (up to 46.8 fatalities/100 000 persons in 2021). By 2021, maximum rates of firearm homicide were up to 22.5 times higher among Black non-Hispanic men (up to 141.8 fatalities/100 000 persons aged 20-24 years) and up to 3.6 times higher among Hispanic men (up to 22.8 fatalities/100 000 persons aged 20-24 years) compared with White non-Hispanic men (up to 6.3 fatalities/100 000 persons aged 30-34 years). Males had higher rates of suicide (14.1 fatalities vs 2.0 fatalities per 100 000 persons in 2021) and homicide (10.9 fatalities vs. 2.0 fatalities per 100 000 persons in 2021) compared with females. Metropolitan areas had higher homicide rates than nonmetropolitan areas (6.6 fatalities vs 4.8 fatalities per 100 000 persons in 2021). Firearm fatalities by county level increased over time, spreading from the West to the South. From 1999 to 2011 until 2014 to 2016, fatalities per 100 000 persons per year decreased from 10.6 to 10.5 fatalities in Western states and increased from 12.8 to 13.9 fatalities in Southern states.

Conclusions and relevance: This study found marked disparities in firearm fatality rates by demographic group, which increased over the past decade. These findings suggest that public health approaches to reduce firearm violence should consider underlying demographic and geographic trends and differences by intent.

JAMA Netw Open. 2022 Nov 1;5(11):e2244221. doi: 10.1001/jamanetworkopen.2022.44221. PMID: 36445703; PMCID: PMC9709653.

By Izedomi Ayeni

Purpose: The purpose of this phenomenological qualitative study was to discover the attitudes and perceptions of police officers on the legalization of recreational cannabis and crime.

Methodology: This qualitative, phenomenological methodology employed the use of semi-structured interview questions consisting of open-ended questions to understand the lived experiences of Colorado Police and Sheriff Officers and their perspectives on the experiences with the legalization of cannabis and crime. The sample size of 16 officers was selected from the sampling frame, which included Denver Police officers and Larimer County Sheriff officers.

Findings: Analysis of the data from interviews resulted in the identification of 14 major findings; 1) Officers oppose legalization; 2) Officers have an unfavorable opinion regarding legalization because they feel it can lead to increased access/use of illicit drugs; 3) Officers feel that the only reason the state legalized cannabis is for the tax revenue it generates for the state; 4) Officers’ viewpoint is that legalization has led to more violent crimes; 5) Officers perceive that Amendment 64 was designed to change perceptions about legal recreational marijuana; 6) Officers feel that legalization has led to an increase in burglary; 7) Officers are cognizant of the possibility of an increase in organized crime activities; 8) Officers expressed displeasure with the decriminalization of non-medical use, possession, and purchase of narcotics; 9) Officers express how an increase in crime has negatively impacted policing efforts; 10) Officers attribute an increase in homelessness and transient population as a symptom of the legalization of recreational cannabis; 11) Officers express frustration with lack of effective regulation; 12) Officers expressed that legalization has had no effect on timely responses to crime; 13) Officers expressed that the biggest challenge faced is maneuvering the demands of state versus federal law; 14) Officers express frustration in navigating the legal requirements relating to legal search and seizure.

Conclusions: As more states are considering legalizing cannabis for recreational use, these findings present significant suggestions for the state legislature and the members of the law enforcement community in those states.

Recommendations: Additional research should be conducted in other states to expand on the perceptions of the law enforcement community pre-and post-legalization of recreational cannabis and the impact it has on crime.

Irvine, CA: Brandman University, 2020. 217p.

By Ty Miller

In December of 2012, Washington and Colorado implemented the legalization of possession and use of marijuana for recreational purposes. Following this, January of 2014, Colorado opened the first recreational marijuana dispensaries in the United States. Although the debate about recreational marijuana has been fought in the public and academic spheres, we have limited empirical data as to the effect of these policies. With this, arguments in regard to whether marijuana should be legalized in the United States have far outpaced reliable scientific research. As more states, and potentially the federal government, begin to vote on whether to legalize, reliable research will be necessary. Sociology provides possible theoretical justifications for both sides of the recreational marijuana debate. However, there is still relatively little research on the effects of legalization in the United States. The current project analyzes changes in measures of excessive drinking, crime, DUI-related fatalities, and DUI arrests in Washington and Colorado following legalization of recreational marijuana. Each set of analyses are carried out in two parts. First, I examine the effects of legalizing possession and use in 2013. Second, I examine the effects of opening recreational dispensaries in Colorado in 2014. These separate analyses are utilized to uncover any shock-effects that might be inherently tied to legalization of possession and use or the opening of recreational dispensaries. Results indicate that, in most of the analyses, there are no significant effects of either part of legalization on the outcome variables of interest. The lone significant effect is that policing of DUI appears to increase following the legalization of possession and use in Washington and Colorado in 2013. The implications of these findings for both sociological theory and policy-making are discussed in the concluding chapter

West Lafayette, IN: Purdue University, 2018. 282p.

By Marie Gottschalk

A closer examination of media coverage, the response of law enforcement and policy makers, the legislative record, and the availability of proven, highquality treatments for substance abuse casts doubt on claims that the country pivoted toward public health and harm-reduction strategies to address the opioid crisis because its victims were disproportionately white people. Law enforcement solutions directed at people who use and sell street drugs continue to far outpace public health and harm-reduction strategies. Government support for expanding access to proven treatments for opioid use disorder that save and rebuild lives remains paltry given the scale of this public health catastrophe. And although the rhetoric has been somewhat more sympathetic, at times it rivals the excesses of the crack era. The article examines the various phases of the opioid crisis as they have unfolded over the past 25 years; related geographic and racial shifts in overdose fatalities with each new phase; media coverage of the crisis; the federal government’s response, including by the US Congress and presidents from George H.W. Bush to Joe Biden; punitive developments at the state and local levels; and the country’s poor record on prevention and making effective treatment widely available for people with substance use disorder.

Annual Review of Criminology, 2023. 6:363–98 . 39p.