Why do prison gangs exist? Despite the prominence of formal governance mechanisms, inmates also require self-governance institutions to facilitate illicit trade. This article examines how inmates enforce agreements in the illicit contraband trade and how they resolve social disputes. We first describe how the informal prison society operates as a community responsibility system. We then present a model of prison gang organization that accounts for both environmental factors and the endogenous actions of the prison administration, encapsulated in the "warden." We find that gangs organize based on exogenous characteristics. The "warden" diffuses gang influence by maintaining the oligopolistic structure, which limits contraband but allows for orderly private allocation of prison-provided goods and dispute resolution.

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PurposeThis paper assesses the efficacy of the 18 small business development centers (SBDCs) located throughout the state of Pennsylvania during 2013–2016 as a proxy for publicly funded, small business consulting services in general.Design/methodology/approachThe paper compares the sales growth of SBDC clients, as reported in postconsultation surveys, to comparable growth measures for the corresponding business population using one- and two-sample t-tests.FindingsThe results show that respondent clients with existing businesses clearly outperform the broader population following consultation, both in aggregate and when decomposed by region and industry.Research limitations/implicationsAlthough the best available data, the results are tempered by low response rates and self-reporting.Originality/valueThe paper empirically demonstrates that SBDC clients experience higher growth in sales and employment following their consultation than the broader business population. The net benefit of such services is, however, impossible to determine.