Unintended Consequences of Enforcement in Illicit Markets
10 Pages Posted: 19 Jul 2014
Date Written: July 17, 2014
Legal enforcement of bans on goods can reduce the size of the black market but lead to greater violence by increasing revenue in the illicit market. However, the link between enforcement and violence is not as simple as is suggested by the textbook model, even for a competitive market. Nevertheless, under plausible assumptions more enforcement on trafficking in the illicit good leads to more violence.
Keywords: black markets, enforcement, violence
JEL Classification: K420, H89
Suggested Citation: Suggested Citation