Credit and Trust

Abstract

Objectives:

This study examines the use of credit, or “fronting,” in the illegal drug economy. We study how fronting affects transaction costs and insulates against law enforcement in drug distribution networks and what role fronting plays in the management of interpersonal network ties. The emphasis is on the cooperative dimension of credits.

Methods:

Qualitative interviews were conducted with 68 incarcerated drug dealers in Norwegian prisons. Most were mid-level dealers (66 percent), dealing with many different drugs, but amphetamines were the main drugs distributed (38 percent). Using qualitative content analysis, we explore their perspective on the fronting of illegal drugs and associated practices in the illegal drug economy.

Results:

We find that dealers are generally skeptical toward fronting drugs, and accepting fronted drugs, but that this practice still is common. The main reason is that the practice secures a faster turnaround. Credits are embedded in social relationships both economically and socially. Previous social relationships are often a prerequisite, but fronting is also used to build trust.

Conclusion:

Although transaction cost economics captures the economic dimension of credit, insights from economic sociology and in particular the social embeddedness approach are necessary to understand the interplay between economic and social factors when drugs are fronted in the illegal economy.