As pointed out in earlier chapters, the state is neither the only organization to engage in delineation nor the only one to use force to enforce rights within what is conventionally viewed as its territory. Other organizations operating in the same territory can act similarly. The medieval Catholic church, for example, delineated certain religion-related rights and sometimes was allowed to use force to enforce them within states that it did not control. States sanction, or at least tolerate, some of these organizations. In this chapter, I focus on criminal organizations operating within the state, but banned by it. They resemble the state in that they, too, delineate rights and forcefully enforce them.

As argued in Chapter 6, the state and criminal organizations can be viable side by side only if they differ in the kinds of power they use. The state seems to have a comparative advantage in the open use of arms and in the use of heavier weapons such as armored cars. Criminal organizations' advantage is in the covert use of arms, and they tend to use small, easy-to-conceal weapons. States can neither easily overpower criminal organizations nor effectively compete with them in their domain.

The two enforce different kinds of agreements; criminal organizations enforce primarily agreements that the state prohibits. They also differ in the ways they adjudicate disputes. Criminal organizations are unlikely to hold their trials in public and probably are less fussy than the legitimate state in the quality of evidence they require. We can expect transactors, then, to be more selective in the agreements they bring to criminal organizations for enforcement.