In the shadow: illegal markets and economic sociology

Abstract

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.