Managing Potential Conflict in Illegal Markets

An Exploratory Study of Cocaine Smuggling in the Netherlands

Published in: Further Insights into Aspects of the Illicit EU Drugs Market / Franz Trautmann, Beau Kilmer, Paul Turnbull (eds.) (Luxembourg: Publications Office of the European Union, 2013.), Part II, Report 2, p. 345-359

Posted on RAND.org on January 01, 2013

by Melvin Soudjin, Peter H. Reuter

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Illegal enterprises operate in settings of risk and uncertainty very different from those in legal businesses. Not only do the state and competitors threaten their transactions and assets but they cannot make use of written contracts, settle disputes through the civil courts or obtain information as readily as their legal counterparts. It is widely assumed that, as a consequence, illegal entrepreneurs, such as drug dealers and human smugglers, make routine use of violence to settle disagreements or punish failures. Studies of drug retailing, mostly in the U.S., show a variety of non-violent dispute resolution methods but there is no study of high level traffickers, whose risk-reward calculations may differ. Analyzing 31 police investigations from the Netherlands, we found data on 33 incidents involving failure of cocaine smuggling related transactions and the subsequent outcome. We examined these incidents for the use of violence and threats. The data show that in most instances the party with a grievance follows routines familiar to legitimate organizations, investigating whether the balance of evidence favours an interpretation of bad luck or incompetence as opposed to an effort to defraud. Most disputes are resolved with neither threat nor violence. However, when negotiations break down, threats and violence are often used. The use of a data base of incidents shows promise in improving understanding of the role and sources of violence in the high level drug trade. This could be relevant for police agencies as incidents that are resolved peacefully hint at future transactions. Violent incidents, on the other hand, may be an indicator that more violence will follow. This is an exploratory study and further research of this type is needed to assess the role and determinants of violence in the higher levels of the drug trade.

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