Bandits Within the State: the Organizational Origins of Spontaneous Order

Ilia Murtazashvili (University of Pittsburgh)
Jennifer Murtazashvili (University of Pittsburgh)

Abstract : The economics literature has long emphasized that order in society arises frequently through a spontaneous process. In this literature, any order arising outside the state is spontaneous. One of the most important examples of such processes is the emergence of norms of ownership. The canonical examples include norms of first possession, such as along the English coast or among miners during the Gold Rush. One of the most interesting features of these processes is that they arise without any organizational structure. This paper argues that in many instances, organizations are an important part of the story of spontaneous order. It uses examples from the American frontier and contemporary Afghanistan to illustrate the argument. In the context of the United States, claim clubs replaced informal norms of first possession early on in each of the major frontier sectors. In Afghanistan, most norms of ownership derive significance within the context of customary governance organizations that perform most of the functions normally associated with the state. As we show, attention to these underlying mechanisms will help scholars gain a greater understanding of the diversity of paths towards political order.

A Protection Model of Kidnapping: Evidence from Colombia

Anja Shortland (King's College london)

Abstract : Ransoming hostages is an extremely tricky economic transaction plagued with trust and enforcement problems. Yet, the large majority of kidnaps is peacefully resolved on a commercial basis suggesting that the trade in hostages is “governed”. This paper explores the role of Mafias in governing the hostage trade in Colombia’s great kidnapping boom from 1993-2010. The FARC, ELN and various drug cartels were infamous for kidnapping. But the usual Mafia business model is to extort “protection” money – what explains the abductions? We analyse more than 35,000 kidnappings over 18 years of civil conflict collected at the municipality level. We show that kidnapping is extremely rare in municipalities controlled outright by drug cartels or insurgents. Instead, kidnapping is associated with territorial disputes and sudden surges in investment and economic activity. Mafias only kidnapped when there were multiple competing “protectors” and to extract payments from (foreign) firms unable to buy protection from “terrorists”. Hostage stakeholders paid premium ransoms to insurgents, because they developed reputations for long detentions and smooth commercial resolutions. This created a secondary market for hostages: high profile victims were sold from disputed territories to insurgents. We argue that the FARC and ELN’s predominance in the kidnap statistics arose not because they were kidnappers but because they were ransoming specialists.

Varieties of Prison Social Order: Why Life in Behind Bars Can Be Heaven or Hell

David Skarbek (King's College London)

Abstract : Why does prison social order vary around the world? While many of the basic characteristics of prisons are similar globally, the extent and form of informal inmate organization varies substantially. This article develops a governance theory of prison social order. Inmates create extralegal governance institutions when official governance is insufficient. The size and demographics of the prison population explain why inmates produce extralegal governance institutions in either decentralized ways, such as ostracism, or through more centralized forms, such as gangs. Comparative analysis of Brazil, Bolivia, England, Scandinavia, and men’s and women’s prisons in California provide empirical support.