Affiliate & Associate

Research

Gang Rule: Understanding and Countering Criminal Governance

Abstract: Criminal groups govern millions worldwide. Even in strong states, gangs resolve disputes and provide security. Why do these duopolies of coercion emerge? Often, gangs fill vacuums of official power, suggesting that increasing state presence should crowd out criminal governance. We show, however, that state and gang rule can be strategic complements. In particular, gangs could minimize seizures and arrests by keeping neighbourhoods orderly and loyal. If true, increasing state presence could increase incentives for gang rule. In Medellín, Colombia, criminal leaders told us they rule to protect drug rents from police. We test gang responses to state presence using a geographic discontinuity. Internal border changes in 1987 assigned blocks to be closer or further from state security for three decades. Gangs exogenously closer to state presence developed more governance over time. They primarily did so in neighbourhoods with the greatest potential drug rents. This suggests new strategies for countering criminal governance.

The Review of Economic Studies