The self-enforcing dynamics of crime and protection

This article presents a model describing symbiotic relationship between criminals and partnership of protection providers, called the Firm. The partners Firm earn profits as they have market power in supply protection. recruits its new among criminals. As result, prospect graduating to adds an incentive for violent crime. result is violence multiplier where more increases Firm, turn contributing violence. also generates providers welcome partners, even though dilute profits. combines elements from contest theory rent-seeking but, nevertheless, results that are contrast standard literature. For example, due interdependence criminals, decrease cost than pari passu value being criminal. Also, tougher competition may benefit all them. empirical relevance key this framework confirmed by exploring unique data on incarcerated youth South Africa. confirm hierarchical gang structure indicate does indeed promote