The Economics of Organized Crime

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The Economics of Organized Crime

Edited by: Gianluca Fiorentini and Sam Peltzman

Centre for Economic Policy and Research

Cambridge University Press

The reviewer must first state that this book is fascinating but difficult. The premise that organized crime families follow economic rules was an intriguing hypothesis and irresistible to the reviewer — this, followed by the implied ability to model and describe them, was too much for the reviewer to resist. It is a masterfully assembled work, and should be read by anyone who might come in contact with organized crime or the effects of organized crime. This should include (at a minimum) law enforcement, insurance, banking, and government officials, plus any economist who thinks he knows how real business models work. You will have your eyes opened wide by the premise and conclusions reached in this book. The authors included sections on: Origin of criminal organizations; Criminal organizations as a firm; Organized crime and state intervention in the economy; Deterrence policies against illegal firms; and Deterrence policies against organized crime.

Two warnings: This book is not for the casual reader: The information is too important to be treated as trivial. The second is for those who see the equations and balk: The equations are there for the economists and those wishing to construct their own models. If you don’t like the equations then read around the math. The message will still come through loud and clear.

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