One aspect of the current elephant poaching crisis is the contribution of organised crime. If we look back to the last time elephants were being decimated in the 1980s, this was not the case. So understanding these criminal organisations and their motivations is important. So far I’ve been able to show that smuggling levels, are in part, driven by shipping costs. And that large shipments of ivory respond to interest rates the same way other financial assets do. That tells us that economic factors are important.
Mulling things over at the moment, I’m tending to the view these new criminal organisations are in part, a product of policy. Rather than criminals just going away after the 1990 international trade ban came into force, new organisations joined the market. The point is that these organisations were different to the existing ones. You didn’t need a big criminal organisation to sell illegal ivory in the 1980s. You got ivory and then you perhaps bribed someone to certify it as legal in Africa. And then away it goes into the legal stream. But once the ban came into place, this wasn’t competitive anymore.
What became competitive was firms that could covertly move ivory from African range states to consumer states. This is a much bigger job. Ivory has to be collected. It has to be hidden in shipping containers. Connections have to be made all along the supply chain. You can’t do what was done in the past- just dump it into the start of the supply chain and let the legal market sell if for you.
So these organisations have to be large to be competitive. But that also starts producing its own advantages. You can employ more specialists. People perhaps more skilled at shipping contraband, or bribing officials, or with a penchant for violence. And because ivory is heavy they experience economies of scale in transport. That means larger firms will tend to be competitive than smaller criminal firms.
So the trade ban, sets up a very high entry barrier to criminal firms that are small and opportunistic. These get replaced by larger firms that can lower their costs (via economies-of-scale) and can deploy greater levels of violence. Some of that is spilling over into ranger-deaths.
So in perhaps more formal terms, the ultimate effect of the trade-ban is change the illegal-market structure. It is was targeted at small criminal firms and enterprises. And we can concede that it has worked against them. But rather than criminals giving up, it created a market opportunity for a different type of criminal firm. These have now become very well established in the market. That’s more or less where I’m going at the moment. Thoughts welcomed.