14 research outputs found
In the shadow illegal markets and economic sociology
Illegal markets differ from legal markets in many respects. Although illegal markets have economic significance and are of theoretical importance, they have been largely ignored by economic sociology. In this article we propose a categorization for illegal markets and highlight reasons why certain markets are outlawed. We perform a comprehensive review of the literature to characterize illegal markets along the three coordination problems of value creation, competition, and cooperation. The article concludes by appealing to economic sociology to strengthen research on illegal markets and by suggesting areas for future empirical research. -- Illegale Märkte unterscheiden sich in vielerlei Hinsicht von legalen Märkten. Trotz ihres großen wirtschaftlichen Gewichts und ihrer theoretischen Bedeutung blieben sie in der Wirtschaftssoziologie bislang weitgehend unbeachtet. Dieses Papier schlägt eine Kategorisierung illegaler Märkte vor und diskutiert die Gründe für ihr Verbot. Auf der Grundlage einer umfassenden Literaturauswertung werden die Strukturmerkmale illegaler Märkte anhand der drei Koordinierungsprobleme der Wertbildung, des Wettbewerbs und der Kooperation dargestellt. Das Papier schließt mit Empfehlungen für zukünftige empirische Forschung.
In the shadow: Illegal markets and economic sociology
Although illegal markets have considerable economic significance and are of theoretical importance, they have been largely ignored by economic sociology. In the first part of this article, we propose a categorization for illegal markets. In the second part, the structural characteristics of illegal markets are described along the three coordination problems of valuation, competition and cooperation. By conceptualizing the structure of illegal markets based on general coordination problems, which are also cornerstones in the study of legal markets, we can locate the systematic differences in the functioning of markets that operate illegally. The article concludes by appealing to economic sociology to strengthen research on illegal markets and suggesting areas for future empirical research. Keywords: illegal markets, sociology of markets, markets, criminology, economic sociology, informal economy, valuation, cooperation, competition JEL classification: D40 market structure and pricing, O17 formal and informal sectors, shadow economy, institutional arrangements, Z13 economic sociology, economic anthropology; social and economic stratification Research on markets stands at the center of economic sociology 2 Politically, the existence of illegal markets presents the state and law enforcement with significant challenges. Socially, illegal markets are important because of the challenge they pose to the moral order of societies. The very limited attention to illegal markets in economic sociology is also an important failure because of the theoretical insights that might be gained from the study of these markets. Ignoring illegal markets excludes an important source of variance from scholarship on markets, foreclosing theoretical advances in the understanding of legal markets. Most importantly, illegality deprives actors of the legal protection of property rights provided by the state for legal market transactions and limits their access to business strategies and organizational forms. 'In the absence of a stable legal framework and credible enforcement of contracts, longterm productive investment becomes impossible ' (Portes and Haller, 2005, p. 409). What consequences for the functioning and organization of markets arise when there is a lack of legal protection for market actors, the threat of legal prosecution of market participants due to their market activities, and the absence of social legitimacy for the exchange? Answering these questions by investigating illegal markets helps us to understand more fully the significance of property rights and law enforcement in the operation of markets and to identify 'which informal institutions effectively motivate relevant economic outcomes' (Feige, 1999, p. 15). The purpose of this article is exploratory and conceptual. Its aim is to offer a basis for empirical research on illegal markets in economic sociology by ordering the field conceptually and hinting at research questions that seem promising. We 2 Authors working in the field and in public institutions such as the UNODC (United Nations Office on Drugs and Crime) have tried to assess the size of illegal markets. All the figures must be read with great caution, however. The wide margins of estimates alone show their imprecision. The estimates at the upper end are often challenged by other researchers, who argue that the figures are widely exaggerated. It is generally believed that the drug market is the largest illegal market. The UNODC estimated its worldwide revenue to be 250 billion was estimated for 2007 (OECD, 2009, p. 1). An estimated 2 and $6 billion (Bernick, 1998, p. 106), which would amount to up to 20% of the total market. It is also estimated that about 10% of the worldwide market for medication consists of fake medication (Cockburn et al., 2005, p. 302). For an overview of the assessments of the size of various illegal markets, see Illegal markets Markets are arenas of regular voluntary exchange of goods or services for money under conditions of competition The multifaceted character of the phenomena of illegality in markets makes it impossible to distinguish illegal markets simply in terms of the products traded on them. Instead, a close reading of the existing literature on illegal markets 3 If there is only a single, non-recurring exchange, one would not speak of a market. Though competition can be severely limited or-as in the case of monopolies-blocked, competition is part of any ideal-typical definition of a market. To this end we present a typology that distinguishes four types of illegal markets according to the specific source of illegality: (1) illegality due to the outlawing of the production of specific goods or services; (2) illegality of the market exchange of an otherwise legal product; (3) illegality of exchange due to theft or product forgery and (4) illegality due to the violation of regulatory stipulations. In the first two types, the market exchange of the product category itself is illegal; in the two latter types, illegal markets are nested within legal markets. It is not possible to depict this typology of illegal markets in a simple two by two matrix because the mixture of juridical and social differentiations concerning the sources of illegality creates a multidimensionality that cannot be categorized fully dichotomously Illegal markets and economic sociology (1) One type of illegal market is constituted through the exchange of products whose production or provision is illegal as such. Current examples are illegal drugs, child pornography, child prostitution, forced labor, and human trafficking. 4 Production or provision of these products and services is forbidden and therefore the market exchange of these goods constitutes an illegal market. (2) A second type of illegal market refers to products or services that are legal as such, but whose exchange on markets is outlawed. The focus here is on the market exchange, which is seen as offensive. As soon as the product or service is treated as a commodity its exchange becomes illegal. An example of this is markets for body parts for transplantation purposes. In the USA the law stipulates that it 'shall be unlawful for any person to knowingly acquire, receive or transfer any human organ for valuable consideration for use in human transplantation' (U.S. National Organ Transplant Act of 1984, quoted from Roth (2007, p. 45)). Similar provisions exist in almost all other countries As a generalizing approximation one can state that type one and type two illegal markets are constituting distinct illegal markets, mostly visible as such to the participants, while type three and type four markets are more typically entangled with legal forms of market transactions, making the illegal activities less visible to outsiders. Informal economy and illegal markets While research in economic sociology has not paid attention to illegal markets as such, the concept of the informal economy has been influential Locating the informal economy on the typology of illegal markets developed here, one would find it primarily in the third and the fourth type. Type one and type two markets are defined by the general illegality of the trade and thereby fall out of the scope of the informal economy as defined by Portes and Haller. The violation of legal stipulations, one of the defining characteristics of the informal economy, is the main characteristic for type four markets. But type 3 or 4 markets do not necessarily form part of the concept of the informal economy. An example would be illegal arms trade which falls outside the spectrum of the largely local, little organized exchange activities addressed by the concept of the informal economy. On the other hand, not every infringement of a legal stipulation common in the informal economy leads to an illegal market. Garments may be produced circumventing labor law but this does not necessarily have to be common practice in the market or may occur without the customer's knowledge. The operation of illegal markets Given the heterogeneity of the phenomena of illegality on markets, it is not possible to describe the functioning of illegal markets in a general model. Nevertheless, it is possible to identify the general traits of illegal markets by analyzing existing criminological, sociological, economic and historical research on illegal markets from a theoretically informed perspective. To systematize our understanding of the functioning of illegal markets, we begin by identifying three coordination problems that confront market actors. These coordination problems we call the problems of value, competition and (Weber, 1978, p. 351) in order for role sets to be reproduced. This holds true for markets under conditions of legality and illegality. This is a general approach to markets that can also guide the study of illegal markets, because actors on illegal markets are confronted with these coordination problems as well. But the actors' efforts to resolve such problems are subject to different challenges because of the illegality of their activities, so other solutions must be sought. Illegality, it will be demonstrated, leads to different and often very cumbersome structures in markets. Value The problem of value refers first to the assignment of value to a certain category of goods (e.g. cars, wine and travel), and second to the assignment of different values to heterogeneous products within the same market. The basis for this is a process of classification and commensuration, in which actors rank products according to how well each product contributes to the fulfillment of a functional need or provides status within a status order of goods The creation of value for a certain class of goods, a vital issue of competitive struggles on legal markets Limitations in the endogenous creation of value in illegal markets stems also from the difficulty of using advertising and other marketing measures on illegal markets which hinders suppliers from contributing actively to the formation of preferences. An exception may be the offering of free drugs to new customers on illegal drug markets (Coomber, 2003, p. 469; Pearson and Hobbs, 2004, p. 469). The curtailing of marketing instruments on illegal markets makes these markets more demand-driven than legal markets. Problems of value on illegal markets are to be found primarily among the difficulties of assessing product qualities in the absence of legally enforceable regulations. Problems of asymmetric distribution of information 6 Problems of quality assessment are especially pertinent in markets of types 1 and 2. In markets for counterfeit goods (type 3), makeshift categories can exist that structure the variety of merchandise (Guyer, 2004, p. 88-92). Only for some of the products offered on illegal markets of type 4 are difficulties in assessing product quality absent. An example is illegal markets for cigarettes in which a standardized product is sold but the tax on that product is not paid The absence of the quality assurance mechanisms and enforceability of product quality operational in legal markets is an important impediment to illegal markets, limiting market expansion and negatively affecting price. How do actors react to the information asymmetries? How do they assess the quality of the products being offered and how do they enforce the delivery of expected qualities? Research shows that also the suppliers on illegal markets attempt to provide devices to reduce uncertainty regarding product quality One device of particular importance is the creation of reputation through personalized networks. In markets for illegal drugs, for instance, networks form between dealers and customers, allowing for an iterative game in which the dealer has an increased interest in providing a predictable product quality in order to ensure ongoing business Illegal markets and economic sociology In addition, the uncertainty regarding product quality may be accepted by the customer out of either desperation or deliberate ignorance. Desperation can emerge from a lack of an alternative legal market for the product (e.g. organ transplantation) or a lack of the financial means to buy the licit product (e.g. fake medication). Deliberate ignorance can be expected if the value of the product emerges primarily from symbolic qualities that are visible to the customer. The purchaser of a faked watch-who is aware of the fact that it is a counterfeit-may be more interested in the label than in the watch's technical finesse. That brand symbols are a cheaply producible and easily recognizable feature may be the main reason-besides the large difference between production costs and retail value-why these products in particular are offered illegally. Competition To ensure profits, suppliers must create market structures that provide protection from (price) competition. In legal markets, this is the outcome of market struggles between suppliers, the state and intermediaries, leading to cartelization, monopolization, product differentiation, innovation, first-mover advantages, entry barriers and legal regulations structuring competition. The state plays a key role in the market struggles in legal markets by laying down ground rules, for instance in competition law or intellectual property law and by granting subsidies or collecting customs and tariffs Though profits of firms in illegal markets are also threatened by competition the instruments applied on legal markets are not available to them. The analysis of competition in illegal markets must focus on the alternative strategies firms use to protect themselves from competitive pressures (1) and on the inefficient competition on illegal markets stemming from intransparency (2). (1) Firms operating on illegal markets must try to avoid competition-just like their counterparts in the legal economy. Because the legal means of protection from competition do not apply, they must resort to other solutions. One of the devices applied is corruption. Through corruption, competition between illegal firms, or between legal firms using illegal means and their counterparts abstaining from such practices, can be manipulated. et al., 2007). Protection from competition through corruption is not only provided by state agencies but also by private 'protection' businesses. The need to pay protection money to organized crime groups in order to enter a market is an entry barrier to a market (Gambetta, 1988a, p. 134), which reduces competition and leads to 'closure of the market' (Weber, 1978, p. 342). The supplying firm does not need to organize illegal entry barriers to the market itself, but can buy the services of organized crime groups who offer 'protection'. The illegal service of protection from competition itself becomes a commodity traded illegally. Protection can involve shielding from new market competitors but can also involve access to new customers, for instance through the commissioning of public work (Gambetta, 1993, p. 22). Payments for 'protection' are associated with high transaction costs and a welfare loss due to lower product quality and higher prices. For market suppliers, however, the (potentially) violent exclusion of competitors from market access secures profits. Although the state is absent as a regulator of competition, claims that monopolies form in illegal markets Cooperation Market actors are confronted with problems of cooperation emerging from the social risks of exchange, notably that of non-fulfillment of contract. These risks arise from the asymmetric distribution of information regarding price, product quality and the possible opportunism of exchange partners in light of incomplete or non-enforceable contracts. This is already an important problem on markets operating legally At the same time, the means available to these actors to enforce trust are much more limited; they more closely resemble pre-modern trust devices than modern ones. While trust in earlier economic configurations was largely anchored in personal relationships, in modern economies trust is mostly made possible through institutions Becoming a party in illegal transactions thus presupposes credible signals of trustworthiness on the side of the trust-taker (Gambetta, 2009) and intensive monitoring on the side of the trust-giver (Spremann, 1988, p. 618). Such signals can be time served in prison or specific tattoos, but also a reputation of reliability from former encounters (Gambetta, 2009, p. 11). The organization of illegal markets on the basis of 'character trust Organizations must be very small, and networks can be only loosely coupled. Studies on human trafficking The high stakes involved in the personal relationships and the absence of the enforcement of contracts through the legal system explain the role of violenceor at least the latent threat of violence-against defectors on illegal markets. Violence becomes a mechanism to enforce cooperation. Nevertheless, studies on illegal markets show that violence is used only reluctantly (Coomber and Maher, 2006, p. 741; Antonopoulos, 2008, p. 281), probably 'to avoid trouble with the public and the police' (Schelling, 1984, p. 163). The risks stemming from the possibility of prosecution and asset seizure have also consequences for the price to be paid by consumers (Reuter and Kleiman, 1986, p. 335; Viscusi, 1986, p. 338). Evidence for this is provided by the observation that legalization of type 1 or type 2 markets leads to a drop in price if the legal successor market is organized as a competitive market. 7 On markets for stolen goods, however, the product will be traded with a significant discount to its legal counterpart if buyers are aware that they are buying a stolen product. 7 For some illegal markets of the first and second type-for example, illegal drugs-there is political debate as to whether these should be transformed into regulated legal markets because of the negative social effects of their illegal operations or because of the potential tax income for the state once the market is legalized Illegal markets and economic sociology 8 This discussion of cooperation problems again shows the crucial role of the state: its influence on the capability of actors in these markets to develop the necessary trust to cooperate. The state can fight illegal markets, but it can also become an accomplice, or even the main supplier of illegal products and services Conclusion Despite the potential importance of the study of illegal markets for market sociology, interest in illegal markets is largely absent from economic sociology. With the exception of work on the informal economy, the criminology, anthropology, law, history and economics research on illegal markets has only a scarce connection to economic sociology. We have shown here how the structures of illegal markets can be studied within a general framework for investigating markets. The suggested course of action for studying these markets is to first identify the coordination problems in market exchange and to then investigate how actors on illegal markets respond to these problems, i.e. what market structures develop in response to the illegality of activities. There are other possible approaches to the study of illegal markets. Focusing on the culture of the market as the subject matter of investigation, for example, can reveal how social context influences attitudes and behavior of market actors The difficulties to overcome the discussed coordination problems in valuation, competition and cooperation stand at the root of severe restrictions in the possibilities for the enlargement of illegal markets and the associated organizations. Often the organization of illegal markets is characterized by the segmental differentiation characteristic of pre-state societies (Paul and Schwalb, 2011, p. 135). Though illegal markets are highly adapted to their environment and efficient within this framework, they are not able to achieve the scope and the level of efficiency observable in legal markets. The 'reputation system' that replaces the legal mechanisms in environments of lacking state authority work only in limited locations and cannot be easily extended to larger areas (cf. Milgrom et al., 1990, p. 20). Moreover, illegal markets suffer from instability, which prevents the sustainability of larger social organizations that could enforce sanctions and provide information (cf
Mobility in a Globalised World 2017
The term mobility has different meanings in the following science disciplines. In economics, mobility is the ability of an individual or a group to improve their eco-nomic status in relation to income and wealth within their lifetime or between gen-erations. In information systems and computer science, mobility is used for the concept of mobile computing, in which a computer is transported by a person dur-ing normal use. Logistics creates by the design of logistics networks the infrastruc-ture for the mobility of people and goods. Electric mobility is one of today’s solu-tions from an engineering perspective to reduce the need of energy resources and environmental impact. Moreover, for urban planning, mobility is the crunch ques-tion about how to optimise the different needs for mobility and how to link differ-ent transportation systems.
In this publication we collected the ideas of practitioners, researchers, and gov-ernment officials regarding the different modes of mobility in a globalised world, focusing on both domestic and international issues
Basic Atomic Physics
Contains reports on five research projects.National Science Foundation Grant PHY 89-19381National Science Foundation Grant PHY 92-21489U.S. Navy - Office of Naval Research Grant N00014-90-J-1322Joint Services Electronics Program Contract DAAL03-92-C-0001National Science Foundation Grant PHY 89-21769U.S. Army - Office of Scientific Research Grant DAAL03-92-G-0229U.S. Navy - Office of Naval Research Grant N00014-89-J-1207U.S. Navy - Office of Naval Research Grant N00014-90-J-164
Modulation of cancer cell growth and progression by Caveolin-1 in the tumor microenvironment
Caveolin-1 (Cav-1), a major structural component of cell membrane caveolae, is involved in a variety of intracellular signaling pathways as well as transmembrane transport. Cav-1, as a scaffolding protein, modulates signal transduction associated with cell cycle progression, cellular senescence, cell proliferation and death, lipid homeostasis, etc. Cav-1 is also thought to regulate the expression or activity of oncoproteins, such as Src family kinases, H-Ras, protein kinase C, epidermal growth factor, extracellular signal-regulated kinase, and endothelial nitric oxide synthase. Because of its frequent overexpression or mutation in various tumor tissues and cancer cell lines, Cav-1 has been speculated to play a role as an oncoprotein in cancer development and progression. In contrast, Cav-1 may also function as a tumor suppressor, depending on the type of cancer cells and/or surrounding -stromal cells in the tumor microenvironment as well as the stage of tumors.
The Dark Net: Self-regulation Dynamics of Illegal Online Markets for Identities and Related Services
Identity data, e.g. data to gain online access to computers, bank accounts, and credit card data, are traded in online marketplaces. This paper investigates the functioning of illegal online markets. These markets lack state regulation and the means to enforce agreements and the paper shows that they use alternative mechanisms to create trust among market participants. The sales outlets of illegal online markets are able to self-regulate the market and should be considered as a major device that makes cyber crime profitable