Mafia licensing creates inter-firm permission systems that regulate entry across territories

Evidence

If all colluding dealers fall within the jurisdiction of one mafioso, he will oversee the subdivision of the territory. But since mafia families are themselves organized by geography rather than by function, the intricacy of the protection market impinges on the economy. Permission cooperate in a given area must be sought if one is to work in a territory other than one’s own: “It must be clear once and for all,” says Salvatore Contorno, “that in order to build or begin any significant activity, it is necessary to obtain the permission of the family with jurisdiction over that territory” (TC: 19). Moreover, permission must be sought through the mafioso who controls the area where the firm is normally based. The importance of this procedure was corroborated by two Palermo building contractors (1-3, l-4). The Catania family used to deliver to their Palermo counterpart the protection money their construction clients paid for doing work in Palermo (AC: I, 197). The size of the construction project is a relevant factor. According to Tommaso Buscetta: If a developer from one province plans to carry out a major project in another province, the possibility of this happening depends on the decision of the interprovinciale,” the body made up of the various provincial commissioni (TB: III, 12-13). Another factor is the interfamily hierarchy: a mafioso usually protects local businessmen; but if an outsider enjoys the protection of another particularly powerful family, local protectors step aside to prevent interference (I-3). — Diego Gambetta, The Sicilian Mafia The Business of…, 523

Categorization

• XREF: Mirrors Milgrom’s Champagne Fairs: controlled entry substitutes for credit screening and enforces reputation. The mafia’s territorial ‘permission’ system functions as an entry barrier exactly like fair gate-keeping.
• DEEPTHINKING: The point that mafia is organized by geography, not function — while protection is demanded functionally — is the structural engine behind the whole ‘orderly market’: jurisdictional overlap forces even the mafia itself into a nested licensing regime that mirrors the state it replaces.