Although such activities are often relatively short term and small scale when compared with legal businesses, three major factors explain the cooperation that sometimes emerges among illegal entrepreneurs. The first factor is systematic corruption, which often permits police or politicians to bring order to illegal activities within a political subdivision. A second factor is overlapping partnerships by which entrepreneurs often launch and maintain illegal businesses. A third factor is the internal economic characteristics of illegal businesses, which shape the manner in which they operate. The paper explores the implications of each factor through historical examples and suggests hypotheses concerning the changing structure of illegal enterprises in American cities. 2 figures and 80 references. (Author abstract)