In the first place, they would waste their time bargaining every month. But there would also be two other, more serious consequences if the contract were only intermittently renewed: Mr. X would be vulnerable to predators in his unprotected months and so could not make long-term plans for investment; and, Don Peppe would be obliged to keep indicating to predators when Mr. X was untouchable and when he was fair game. The undesirable effects would be twofold: predators might become confused and attack Mr. X in the wrong month; alternatively, Mr. X might remain safe during a month when he had not paid, thereby enjoying free protection. In addition, Don Peppe could not easily monitor all former clients who might continue to use his name even when they were no longer paying for the right.

XREF: Connects to the logic of protection rackets and how recurring-payment models solve enforcement and signaling problems for both parties.

Diego Gambetta, The Sicilian Mafia The Busi…, loc. 147