Mafia protection makes collusion more likely, elaborate, and enduring

Evidence

Although it is difficult to establish ex post facto whether a given collusive arrangement would have come about even without mafia intervention, the availability of mafia services generally makes collusion more likely, more elaborate, and more enduring. Sectors ranging from the construction and transport industries to flower sellers on the street have been territorially controlled by the mafia in Sicily. Those who pay protection money expect territorial policing as a matter of course. As a partner in a firm near Palermo that sells reconditioned tires argued, “The least those who protect you can do is offer to discourage competitors should they want to enter your territory” (I-8). — Diego Gambetta, The Sicilian Mafia The Business of…, 521

Categorization

• XREF: Directly extends the Cartel-Model chapter of Gambetta’s own argument, and maps onto Milgrom’s observation that private order institutions lower the cost of coordinated collusion. — connects to: Racket-run cartels reduce production efficiency more than conventional cartels — Diego Gambetta, The Sicilian Mafia The Business of…, 531; Mafia enforcement makes distrust rational and blights mutual-benefit competition; Mafia protectors favor group cartels over monopolies to avoid defection risks (+4 more)
• corroborated: 2 independent passages support this claim — Diego Gambetta, The Sicilian Mafia The Business of…, 521

Broader Connections

• Mafia protectors favor group cartels over monopolies to avoid defection risks #expands (0.80)
• The mafia can be understood as an industry selling private protection #expands (0.78) — Diego Gambetta, The Sicilian Mafia The Business of…, 10
• Mafia enforcement makes distrust rational and blights mutual-benefit competition #complicates (0.75)