Organized Crime and Corruption Across Borders by T. Wing Lo Dina Siegel Sharon I Kwok

Author:T. Wing Lo, Dina Siegel, Sharon I Kwok [T. Wing Lo, Dina Siegel, Sharon I Kwok]
Language: eng
Format: epub
ISBN: 9780367142766
Goodreads: 45914005
Publisher: Routledge
Published: 2019-09-12T00:00:00+00:00

Establishing trust in the underworld

In both the legitimate and the illegal setting, parties undertake a certain degree of risk when entering into any kind of transactions. Such risks may come from the uncertainty of whether the other party will carry out the transaction or not honor the agreement. Further risks are posed considering that there is a possibility that one party may defect on the agreement, the quality of the goods does not meet the standards held in the agreement, or there is a delay in delivery resulting in loss and damages. Criminals involved in illegal transactions are faced with additional risk factors such as the risk of defection and betrayal by one of their kind that could lead to arrest and detection by authorities. Under conditions of illegality, illegal transactions are not governed by formal institutions, and criminals cannot rely on the courts to enforce their contractual agreements if one party fails to honor it. Given the absence of legitimate measures to enforce contracts and to resolve disputes, the risks of defection and arrest are high.

Trust is a rare element in the underworld. Under conditions of criminality, to trust someone includes a high degree of risk including the possibility that the party will not deliver, deliver faulty goods, or engage in betrayal or total defection. The cost of trusting the wrong person is significant, leading to possible imprisonment or even death. However, illegal trade and transactions remain a key feature of and a frequent occurrence in the underworld (Campana and Varese, 2012; Sandberg, 2012; South and Wyatt, 2011; Warchol, 2004; Zimmerman, 2003). Existing studies have highlighted various mechanisms in which criminal networks enhance trust in their operations. Three mechanisms will be discussed in the chapter are as follows: (1) risk and price model, (2) ethnicity, (3) reputation.

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