"This is a remarkable study of a ''natural experiment'' in the evolution of government. Put a couple of thousand men, not of the nicest kind, into close confinement with limited communication facilities and little government, and see what happens. What happens is government, based largely on ethnic gangs, with hierarchy, rules, and sometimes written constitutions. The basic problem to be solved is the management of the market for drugs, and solving that leads to genuine institutions. A great read." --Thomas Schelling, Nobel Laureate in Economics (2005) "David Skarbek has written a wonderful book. It is a gripping account of prison gangs, pointing to a wholesale re-thinking of the management of American prisons. But it is far more than this: if you care at all about ethnic politics, violence, and the emergence of social order, organizational theory and the problems of collective action-in short, if you have any interest at all in how societies govern themselves-you have to read this book.

" --Philip Keefer, Lead Economist, Development Research Group, The World Bank "David Skarbek''s The Social Order of the Underworld can be read with great profit on each of three levels: it is an engrossing ethnography of American prison life; it is a penetrating economic analysis of the organization of the drug trade; and it offers an innovative theory of how an effective governing institution can originate in the wild and exert legitimate domination over its subjects. This book is a stunning achievement that makes me proud to be a social scientist." --David D. Laitin, Watkins Professor of Political Science, Stanford University "Meticulously researched and convincingly argued. Skarbek''s book is an outstanding addition to our understanding of self-governance, its ubiquity, and effectiveness." --Peter T. Leeson, George Mason University, and author of The Invisible Hook: The Hidden Economics of Pirates "Skarbek''s study of California prison gangs offers delightfully fresh perspective on the relationship between underworld''s informal institutions. He argues that gangs evolved as substitutes for another set of informal rules, i.

e., systems of criminal codes. The rules constantly evolve to lower transaction costs and often stabilize interactions and reduce chaotic violence unrelated to business enforcement. This is a first rate and novel take on the structure of organized criminal enterprises." --Marek Kaminski, University of California, Irvine, and author of Games Prisoners Play "Drawing on economic theory, David Skarbek shows how social order can emerge in the most unlikely circumstances. In the nasty and brutish world of American prisons, gangs have emerged to govern the penal system, settle dispute and regulate the market for drugs. This is a story about the ingenuity of gang members and of institutional failure. The Social Order of the Underworld straddles all the social sciences to give us a masterly account of the human condition in the most harrowing circumstances.

Add a vivid narrative style and the total absence of jargon, and you have in your hand a terrific book." --Federico Varese, Professor of Criminology, Oxford University "Skarbek shows how gangs have spread through the prison system in the United States. He argues, convincingly, that gangs offer protection and governance in places where established institutions fail, and that it makes sense for prisoners to join them. Mr. Skarbek''s analysis confounds the assumption that prisons are stuffed with violent, racist thugs who act irrationally. The very logic of gangs'' existence may be the key to constraining them. Reduce demand for their services, he argues, by locking up fewer people and making prisons safer, and their appeal would diminish." --The Economist "A fascinating account of how prison gangs operate.

" --American Renaissance "This is a thoughtful book that contains much of value, not least in the ways it surveys a mass of data and illustrates its central theme: how gangs operate as alternative governmental bodies within the American penal system. Skarbek uses a wide range of sources.to build up a nuanced and detailed picture of elements of the history, and much of the current organizational strategy of America''s prison gangs. The Social Order of the Underworld is thought-provoking and challenging." --Tim Newburn, The London School of Economics and Political Science "A fascinating new book." --Matt Ridley, The Times.