Disciplinary violence

• Recall: the principal-agent problem
  • A principal delegates a task to an agent, but cannot perfectly monitor them
  • The agent has private information and their own interests, so incentives may not be aligned
• Criminal organizations cannot enforce contracts through courts or other formal mechanisms
  • Disputes over pay, responsibilities, or turf cannot be settled legally
  • Disciplinary violence is how organizational control is exercised
• Leaders use disciplinary violence against subordinates for two reasons:
  1. Punishment: members who steal, underperform, or inform face physical sanction
  2. Preventative: the longer a subordinate stays, the more they know
     • Information accumulated over time becomes a liability if they defect or get arrested
     • Leaders may eliminate subordinates before they become a threat

Successional violence

Think-pair-share: violence within criminal groups

• Disciplinary violence:
  • Leaders sanction members who steal, underperform, or inform
  • Or preventatively eliminate them before they become a threat
• Successional violence:
  • Members signal resolve through violence to move up the ranks
  • Leadership transitions create power vacuums

Private information and signaling

• If fighting is costly, why don’t criminal groups always negotiate instead?
• Each side has private information about their own strength, resources, and resolve
• And incentives to misrepresent that information:
  • Everyone claims to be stronger than they are
  • Cheap threats are not credible
• Because rivals cannot tell truth from bluff, negotiations often fail
• Violence is a costly signal that reveals information
  • For example, groups that keep fighting demonstrate actual strength

Commitment problems

• Even when groups agree on relative strength, negotiations can still fail
• A commitment problem arises when you cannot credibly promise to stick to a deal
  • No higher authority to enforce promises
  • The compromise now may create future vulnerability
• First-strike advantages: hitting first gives a major strategic advantage
• Shifting power: better to fight now than negotiate from a worse position later
• Strategic turf: conceding territory or a market may hand the rival greater future power

Issue indivisibility

• Some disputes cannot be easily split or compromised, such as territory
  • A street corner, a trafficking route, a prison wing: you control it or you don’t
• If no “middle ground” exists, there is no settlement both sides prefer over fighting
• In criminal markets, indivisibility is often socially constructed
  • Groups invest in making turf symbolic: retreat becomes reputationally costly
  • Once that happens, compromise is no longer just a strategic loss but a signal of weakness

Think-pair-share: violence between criminal groups

• Even though it’s costly and groups may be better off negotiating, groups fight:
  • Private information and signaling: to communicate what negotiation cannot
  • Commitment problems: because no one can credibly promise to stick to a deal
  • Issue indivisibility: because some things cannot be split

The state as victim

• More likely when the state intensifies enforcement: violence is a backlash
• More likely when the organization has broader political goals beyond market control
• Targets vary by purpose:
  • Honest officials: eliminate effective opponents; deter others
  • Corrupt officials: punish those who fail to deliver; discipline the protection market
  • Politicians and judges: undermine prosecution and extradition

The state as perpetrator

• Organized crime enforcement is among the most violent forms of non-war state action
  • Disproportionately concentrated in poor and marginalized communities
• Enforcement signals state capacity and hopes to deters future criminal activity
• Political pressure to “do something” about crime rewards visible, aggressive action
• Violence may substitute for the institutional capacity to prosecute

The state as collaborator

• The state is not always a neutral enforcer: it can be a partner in criminal violence
• State actors collaborate with criminal organizations when:
  • Officials are bribed to look the other way or share intelligence
  • The state selectively enforces against rivals of a protected group
  • Criminal organizations provide services to the state such as votes

Think-pair-share: the state and criminal violence

• The state plays three distinct roles in criminal violence:
  • Victim: targeted by criminal organizations to deter enforcement or undermine the state
  • Perpetrator: uses violence to signal capacity and suppress criminal activity
  • Collaborator: partners with criminal organizations for mutual benefit

Not all illegal markets are violent

• The naive answer: illegality breeds violence
• Snyder and Durán-Martínez: the key variable is institutions of protection
  • When state officials and OC form stable arrangements, markets can be peaceful
  • When those arrangements break down, violence follows

Case study: cooperation in Mexico under PRI hegemony

• The PRI (Institutional Revolutionary Party) ruled Mexico for 70+ years (1929–2000)
  • Centralized political control extended across all levels of government
  • “Corruption is not a characteristic of the system… it is the system” (Morris, 2009)
• This created ideal conditions for a state-sponsored protection racket:
  • Dominant party “the perfect dictatorship” \(\rightarrow\) one set of rules, predictable enforcement
  • Long time horizons: officials expected to stay in place, deals could be honored
  • Centralized geography of enforcement: one protector, several organizations

Case study: breakdown of state-OC cooperation

• Democratization shortened time horizons and fragmented enforcement
  • Uncertainty about electoral outcomes
  • Different parties won office across states \(\rightarrow\) no single set of rules anymore
  • Anti-corruption reforms: officials rotated more frequently meant deals couldn’t be honored
• Without stable state partners, OC turned to violence to protect their markets
• Then: Mexican federal government launches its own war on drugs (2006)
  • Kingpin strategy fragmented DTOs, creating vacuums and waves of violence

Revisiting effectiveness

For Wednesday: criminal governance

• Today: when and why does organized crime use violence?
  • Violence within groups: discipline and succession
  • Violence between groups: information, commitment, and indivisibility
  • Violence between groups and the state: victim, perpetrator, collaborator
  • Why some markets are more violent than others
• We did not cover everything: drug market violence also travels into homes through debt collection, theft, and parental preemption
• Next lecture: criminal governance
• Questions?