5 - Government Threats and Group Leader Strength

Summary

Based on a year of fieldwork in Lagos markets, Chapter 5 looks in depth at four markets, demystifying leadership behavior and the role of politics, and testing the part of the theory that focuses on threats and leader strength. The first market is an archetype of private good governance, and the chapter assesses the extent to which the conditions that sustain these policies are consistent with the book’s theory. The other three markets are governed by leaders who fail to create supportive environments for traders. Prior studies assume that such groups disappear quickly, as current group members abandon them and prospective group members decide not to join. The chapter documents that these groups can persist for much longer than previously assumed. One of the markets highlights a special type of group: one in which the group leader extorts from their own members. Previous studies have assumed that group members are mobile and would simply move to a better group if a leader attempted to extort from them, and that group leaders would therefore refrain from extorting for fear of losing members. This case study illustrates how predatory leaders exploit traders’ immobility.