How organized is organized crime? Why the Mafia should not exist and why it yet does

Criminal organizations are relatively enduring, externally closed, internally differentiated entities. Generally speaking, organized crime is based on a specific division of labor; it supplies illegal goods and services, and thus contains an economic component. Nevertheless, popular and well-established explanations of criminal organization which find their bases in transaction cost theory are not adequate to account for this phenomenon. Properly speaking a pure economic interpretation of the specific features of illegal enterprise would contradict the establishment of vertically integrated organizations. Drawing on the example of the Sicilian Mafia, we show that criminal organizations do survive and prosper, but only if they become political institutions as well and act as such. Adapted from the source document.