Paper short abstract:

This paper examines the informal institutions through which states regulate smuggling economies and illegal global value chains. It highlights implications for the study of informal institutions, the politics of smuggling economies, and development outcomes.

Paper long abstract:

Contemporary writing on smuggling and illegal global value chains commonly conceptualises them as ungoverned, under the radar of states.

This paper challenges that conception, demonstrating that the vast majority of smuggling activity in North Africa is in fact highly regulated through a dense network of informal institutions that determine the costs, quantity and types of goods that can pass through certain nodes, typically segmenting licit from illicit goods. While informal, the institutions regulating this trade are largely impersonal and contain third party enforcement, hence providing a direct empirical challenge to common characterisations of informal institutions in political science. The paper argues that revisiting the characteristics associated with informal institutions, and understanding them as contingent on their political environment, can provide a new starting point for studying institutions, the politics of informality, state capacity, and the regulation of illegal economies. It also highlights the importance of studying the intersection of states and smuggling economies in order to understand important sections of global value chains.