Abstract
Illegality does not necessarily breed violence. The relationship between illicit markets and violence depends on institutions of protection. When state-sponsored protection rackets form, illicit markets can be peaceful. Conversely, the breakdown of state-sponsored protection rackets, which may result from well-meaning policy reforms intended to improve law enforcement, can lead to violence. The cases of drug trafficking in contemporary Mexico and Burma show how a focus on the emergence and breakdown of state-sponsored protection rackets helps explain variation in levels of violence both within and across illicit markets.
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Notes
See, for example, Gambetta [9].
We leave aside such cases of non-enforcement “by default,” that is, where the state is either absent or lacks the capacity to enforce the law even if it wanted to.
Dal Bó et al. [6] use a similar logic to explain how pressure groups extract policies more easily from government officials when they can use both transfers, such as bribes, and threats at the same time in order to get policy favors.
For the sake of simplicity, we assume there is no collusion among protectors or among criminal organizations.
It bears emphasis that deploying violence is costly to criminal organizations, because it can destroy wealth and jeopardize profits by bringing unwanted scrutiny from the public and law enforcement [19]. A more fully specified model of state-sponsored protection rackets should include as an endogenous factor the cost to both organizations and protectors of using violence.
We thank Sebastián Mazzuca for calling this matter to our attention.
Moreover, dealing with a single organization should be attractive to protectors because it lowers their transaction costs.
We assume there is just one protector.
We assume the protector has the capacity to put the criminal organization out of business. A more complex model would relax this assumption by considering the uncertainty protectors face about whether their efforts to shut down the organization will, in fact, succeed. Failed attempts to drive a criminal organization out of business may result not in praise and a promotion, but in criticism and a demotion or worse, especially if these failed efforts generate violence and negative publicity. A more complex model of state-sponsored protection could also allow for “incremental enforcement,” which would permit protectors to alter the costs of doing business faced by criminal organizations without necessarily destroying them.
The optimal number of criminal organizations from the standpoint of a protector is not clear. Two are better than one, but are three better than two? As noted, monitoring and other transaction costs, which rise as the number of organizations increases, pose an important constraint on the number of organizations preferred by protectors. Moreover, too many organizations can generate excessive competition that would dissipate profits and thus reduce the rents available to protectors. Still, as long as competition among organizations does not reduce the rents available to a protector to an amount less than E + 1, that is, to a level just above the value of the raise or promotion the protector can earn by enforcing the law, then it should prefer multiple organizations to one.
By the same logic, no organization is willing to pay a premium price (P*) for exclusive rights to protection, because a protector cannot make a credible commitment that, after taking the premium payment, it will actually deliver on the promise to drive all the organization’s rivals out of business.
Still, protectors may prefer some level of violence, because it can drive up the value of protection.
However, Astorga [3] notes that many rival drug trafficking organizations had common origins in the state of Sinaloa and thus to some extent “all of them emerged from the same root.” As a result, the boundaries among the organizations were difficult to draw precisely.
Mexico is a federal system with 31 states.
For example, in 1985, the DFS was shut down and replaced by another centralized agency, the Center for Research and National Security (CISEN). Then, in 1993, another agency, the National Institute to Combat Drug Trafficking, was created alongside CISEN.
The office of Assistant Attorney General "A" controlled the states of Aguascalientes, Campeche, Distrito Federal, Durango, Guerrero, México, Morelos, Nuevo León, Sonora and Veracruz; the office of Assistant Attorney General "B" controlled Baja California Sur, Chihuahua, Colima, Guanajuato, Hidalgo, Jalisco, Oaxaca, Tabasco, Tamaulipas, Yucatán and Zacatecas; and the office of Assistant Attorney General “C” controlled Baja California, Chiapas, Coahuila, Michoacán, Nayarit, Puebla, Querétaro, Quintana Roo, San Luis Potosí, Sinaloa and Tlaxcala.
The reforms thus correspond to a shift from scenario a to d in Fig. 1.
The offices of the Assistant Attorneys General for Prosecution were dismantled in 2002, and the main argument to eliminate them was precisely that “the current zones comprise discontinuous territories; the same delegation can include states in the North, South and Center of the country […] it is necessary to reform the structure in order to achieve greater coordination in the fight against crime” Justification to the Organic Law for the Attorney General’s Office (LOPGR), 23 April 2002.
In January 2007, Felipe Calderón initiated his term as President of Mexico with the mass extradition of 15 prominent drug traffickers.
Moreover, in some cases, the seconds-in-command, who often replaced their captured or extradited leaders, had stronger military orientations than their predecessors and were thus more prone to use violence.
We use indexes of spatial autocorrelation (Moran’s I and LISA maps) and simple mapping techniques that we do not report here because of space constraints. These analyses are available from the authors by request.
The most significant and stable cluster of high violence during this period was located in southwest Mexico, in the states of Oaxaca, Guerrero, Chiapas, and Puebla. This cluster was likely caused by political instability unrelated to drug-trafficking dynamics.
Between 1981 and 1996 the value of the Moran’s I statistic, an indicator of spatial clustering, ranged from −0.13 to 0.48, with a mean of 0.29, and its significance level ranged from p = 0.001 to p = 0.032, with a mean of 0.02. Between 1997 and 2003, the Moran’s I ranged from −0.005 to −0.26 with a mean of −0.18, and its significance level ranged from p = 0.03 to p = 0.58, with a mean of 0.17. It is important to note that the Moran’s I statistic is not usually compared across time, and, hence, the values reported here should be taken as descriptive measures and not as statistical trends. Still, the notable change in the value of the Moran’s I statistic and its significance levels, coupled with a mapping of homicide rates over time, provide strong suggestive evidence of a lack of spatial correlation in levels of violence after 1996.
This analysis of the case of Burma draws on Snyder [21].
Still, if state officials, especially those involved in law enforcement, enjoy autonomy from elected politicians and thus are not directly subject to “democratic control”, their time horizons may be long, and, hence, they may have the capacity to forge durable institutions of protection.
Reuter [18] notes that “rates for violent crime peak early, at about ages 18–22.”
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Acknowledgements
We thank Peter Andreas, Sukriti Issar, Stephen Kosack, Crystal Linkletter, Sebastián Mazzuca, and Joel Wallman for helpful suggestions on this material. Angelica Duran-Martinez’s research in Mexico in 2008 was supported by a Summer Fieldwork Fellowship from the Graduate Program in Development (GPD) at Brown University.
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Snyder, R., Duran-Martinez, A. Does illegality breed violence? Drug trafficking and state-sponsored protection rackets. Crime Law Soc Change 52, 253–273 (2009). https://doi.org/10.1007/s10611-009-9195-z
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DOI: https://doi.org/10.1007/s10611-009-9195-z