Cosa Nostra Courts

Abstract

This paper uses economic reasoning to analyze the traditions and institutions of one of the most successful criminal organizations in modern American history: La Cosa Nostra (LCN). Drawing on recently declassified FBI reports, I argue that LCN’s core institutions helped protect its low- profile status, an asset vulnerable to free riding by its own members. Individual members did not bear the full costs of profile-raising police investigations and thus had a perverse incentive to resolve disputes violently. LCN preserved its low profile by incentivizing peaceful reconciliation. La Cosa Nostra rules, and, more importantly, its surprisingly formal court system, kept disputes from escalating into violence, thereby helping LCN avoid profile-threatening investigations. LCN’s longevity and success are, in part, a testament to the institutions’ efficacy.

Keywords: La Cosa Nostra, courts, secrecy, dispute resolution

JEL Classification: K4, L2