The Organization of Danish Gangs: A Transaction Cost Approach

Stefan Kirkegaard Sløk-Madsen, David Skarbek*, Andreas Hansen, Alexander Rezaei

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


How do criminal groups organize, operate, and govern in Denmark? We argue that organized crime groups face governance challenges in the form of principal-agent problems and transaction costs. Based on interviews with law enforcement officers, former gang members, and prisoners, we provide evidence for how people involved in crime respond to these organizational dilemmas. We find that the more severe the principal-agent problem, the more gangs vet possible members during recruitment. We also find that as transaction costs rise, people who are engaged in illicit activities that are more complicated will rely more on internal structure and centralization. Our findings support existing rational choice theories of criminal organizations.
Original languageEnglish
JournalTrends in Organized Crime
Issue number3
Pages (from-to)361-377
Number of pages17
Publication statusPublished - Sep 2021

Bibliographical note

Published online: 10 March 2021.


  • Organized crime groups
  • Outlaw motorcycle gangs
  • Rational choice theory

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