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Gov-aargh-nance: "Even Criminals Need Law and Order"

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  • Olaf J. de Groot
  • Matthew D. Rablen
  • Anja Shortland

Abstract

We present a theoretical model postulating that the relationship between crime and governance is "hump-shaped" rather than linearly decreasing. State failure, anarchy and a lack of infrastructure are not conducive for the establishment of any business. This includes illegal businesses, as criminals need protection and markets to convert loot into consumables. At the bottom end of the spectrum, therefore, both legal business and criminal gangs benefit from improved governance, especially when this is delivered informally. With significant improvements in formal governance criminal activities decline. We use data from the International Maritime Bureau to create a new dataset on piracy and find strong and consistent support for this non-linear relationship. The occurrence, persistence and intensity of small-scale maritime crime are well approximated by a quadratic relationship with governance quality. Organised crime benefits from corrupt yet effective bureaucrats, and informally governed areas within countries.

Suggested Citation

  • Olaf J. de Groot & Matthew D. Rablen & Anja Shortland, 2011. "Gov-aargh-nance: "Even Criminals Need Law and Order"," Economics of Security Working Paper Series 46, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diweos:diweos46
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    Cited by:

    1. Olaf J. de Groot & Matthew D. Rablen & Anja Shortland, 2012. "Barrgh-gaining with Somali Pirates," Economics of Security Working Paper Series 74, DIW Berlin, German Institute for Economic Research.
    2. Olaf J. de Groot & Matthew D. Rablen & Anja Shortland, 2011. "Gov-aargh-nance - "even criminals need law and order"," CEDI Discussion Paper Series 11-01, Centre for Economic Development and Institutions(CEDI), Brunel University.
    3. Bellais Renaud, 2013. "Fighting Piracy and International Public Goods: The Atalanta Experiment in the Horn of Africa V3," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 19(1), pages 73-101, April.
    4. Anja Shortland & Federico Varese, 2012. "The Business of Pirate Protection," Economics of Security Working Paper Series 75, DIW Berlin, German Institute for Economic Research.
    5. Singh Currun & Bedi Arjun Singh, 2013. "Regional Dimensions of Somali Piracy and Militant Islamism: Anthropological and Econometric Evidence," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 19(3), pages 369-380, December.
    6. Anja Shortland & Sarah Percy, 2012. "Counter-Piracy in Somalia: Help or Hindrance?," CEDI Discussion Paper Series 12-03, Centre for Economic Development and Institutions(CEDI), Brunel University.
    7. Shortland Anja & Percy Sarah, 2013. "Governance, Naval Intervention and Piracy in Somalia," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 19(2), pages 275-283, August.
    8. Tilman Br�ck & Olaf J. De Groot, 2013. "The Economic Impact of Violent Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(6), pages 497-501, December.
    9. Paul Hallwood & Thomas J. Miceli, 2013. "An examination of some problems with international law governing maritime piracy," Maritime Policy & Management, Taylor & Francis Journals, vol. 40(1), pages 65-79, January.
    10. Inmaculada Mart�nez-Zarzoso & Sami Bensassi, 2013. "The Price Of Modern Maritime Piracy," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(5), pages 397-418, October.
    11. Ursula E. Daxecker & Brandon C. Prins, 2015. "Searching for Sanctuary: Government Power and the Location of Maritime Piracy," International Interactions, Taylor & Francis Journals, vol. 41(4), pages 699-717, August.
    12. Shortland Anja, 2015. "Can We Stop Talking about Somali Piracy Now? A Personal Review of Somali Piracy Studies: Annual NEPS Lecture 2015 at Warwick University," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 21(4), pages 419-431, December.
    13. Jablonski, Ryan S. & Oliver, Steven & Hastings, Justin V., 2017. "The Tortuga disease: the perverse effects of illicit foreign capital," LSE Research Online Documents on Economics 67105, London School of Economics and Political Science, LSE Library.
    14. Anja Shortland, 2010. "The Business of Piracy in Somalia," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 6(23), pages 182-186.
    15. Olaf J. de Groot & Marc Vothknecht, 2011. "What Can Be Done to Reduce the Occurrence of Piracy in the Short and Long Run?," EUSECON Policy Briefing 2, DIW Berlin, German Institute for Economic Research.
    16. Hotte, Louis & McFerrin, Randy & Wills, Douglas, 2013. "On the dual nature of weak property rights," Resource and Energy Economics, Elsevier, vol. 35(4), pages 659-678.
    17. Michael Brzoska & Raphael Bossong & Eric van Um, 2011. "Security Economics in the European Context: Implications of the EUSECON Project," Economics of Security Working Paper Series 58, DIW Berlin, German Institute for Economic Research.
    18. Khusrav Gaibulloev & Todd Sandler, 2016. "Decentralization, institutions, and maritime piracy," Public Choice, Springer, vol. 169(3), pages 357-374, December.
    19. Sarah Percy & Anja Shortland, 2013. "Contemporary Maritime Piracy: Five Obstacles to Ending Somali Piracy," Global Policy, London School of Economics and Political Science, vol. 4(1), pages 65-72, February.

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    More about this item

    Keywords

    Governance; Crime; Piracy; Informal Institutions; Law enforcement;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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