Inequality and Guard Labor, or Prohibition and Guard Labor?

A few days ago, I posted the abstract of my working paper with Vadim Kufenko on guard labor and prohibition enforcement. At that time, the paper was not yet uploaded in the official working papers series. This is no longer the case. The abstract is below and the article can be consulted here:

In this paper, we consider whether or not inequality forces society to expend more resources on supervision which imposes an extra cost to doing business. Some argue that since inequality deteriorates social capital, there is a greater need for supervisory labor which is a costly burden to bear. We propose an alternative (but not mutually exclusive) explanation. We argue that the war on drugs leads to institutional decay and lower levels of trust which, in turn, force private actors to deploy resources to supervise workers and protect themselves. Our explanation complements the argument regarding the link between inequality and guard labor.


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