By Patricio Estevez-Soto, on 21 April 2017
We are happy to announce a new seminar: Governing Criminal Markets: The role of insurers in kidnap for ransom, by Dr Anja Shortland, from King’s College London.
The seminar will be held on Tuesday April 25, 2017 at 5:15 pm, in the Teaching room of the Department of Security and Crime Science (35 Tavistock Square, London, WC1H 9EZ). As usual we welcome all who are interested in the topic of organised crime, and the OCRN will provide refreshments for informal networking after the seminar.
Dr Anja Shortland is a Reader in Political Economy at King’s College London. Anja was an Engineering and Economics undergraduate at Oxford University and did her Masters and PhD in International Relations at LSE. Before joining King’s, she worked as a lecturer in Economics at Leicester, a Reader in Economics at Brunel University and as a consultant to the World Bank. Anja’s research broadly falls into three categories: 1) the economics of crime, 2) informal governance, and 3) civil conflict. She is currently working on the topic of kidnap for ransom, examining who kidnaps and why, how ransoms are negotiated and kidnaps resolved, and who provides the governance for this tricky market. She has published widely on the issue of maritime piracy and co-authored the 2013 World Bank Policy Report: “The Pirates of Somalia: Ending the Threat; Rebuilding a Nation.”
The intersection between the formal and criminal economies presents a range of intractable coordination and enforcement problems. Who orders and facilitates the interactions between private, legal entities and criminals (potentially) engaged in kidnap for ransom? Dr Shortland analyses the contracts, protocols, norms, and agencies created by insurers to govern this unusual market. Stringent insurance contracts, effective security measures and orderly resolutions create a profitable market for kidnap insurance. Underwriters manage moral hazard and adverse selection. Business risk consultancies minimise the kidnapping of insured workers, high net-worth individuals, and travellers. Crisis responders ensure that hostages are treated well, keep ransoms moderate and stable, and discourage kidnappers from reneging on agreed ransoms. The state, private sector and mafias incentivise co-operation and enforce contracts. Understanding this complex polycentric governance architecture is crucial for remedying current trends in “terrorist” kidnap for ransom.