Monday, March 22, 2010

Why the Mafia persists

In 2000 two researchers asked 230 shopkeepers in Russia whether they had contact with local protection rackets. Over 40% responded "yes". Those who had been contacted were asked to rate the problems of operating a small business on a scale from 1 to 10. Here are the responses:


That is, contact with a local protection racket rates lower as a business problem than taxes or rent.

(Source: Frye & Zhuravskaya, "Rackets, Regulation, and the Rule of Law" 2000)

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