Organized Crime: Defined “The predominant forms of organized crimes exist to provide goods and services that are either illegal, regulated, or in short supply. It is the presence of one or more of these limiting conditions and a desire by a large enough segment of society for the particular goods and services that make their provision a profitable business” (Finckenauer 2008 p 67) “[…] loosely affiliated networks of criminals who coalesce around certain criminal opportunities”
(cont.) Organized Crime: Defined society’s Demand for goods + restricted Supply for goods (through legal means) = Organized Crime becomes the illegal supplier
Common Crime and Organized Crime Development of new markets for stolen goods Easy recruitment of “cheap labor” Multiple models and fluid connections Horizontal integration
Car Theft: An Example The structure and organization. Car theft as organized crime. Close to 1,000,000 cars are stolen every year in the region. A $3-5 billion dollar market.
Organized Crime in Latin America (supply side) structurally-differentiated by functions and trades. loosely connected and multiple players. competition and fragmentation. participation by state actors.
Fragmentation of Deterrence a) Transitions to democracy?: No b) Federalism?: To some extent
Why Organized Crime Exploded? (Economy) The Drug Trafficking Problem The proliferation of Piracy and counterfeiting (cheap technologies) The fragmentation of markets and the expansion and the reduction of trade barriers Low labor cost
Why Organized Crime Exploded? (Institutional) Who has the upper hand? Police or crime ring leaders? Critical mass and tipping point The “capture” of law enforcement agencies
Police Reform in Mexican States The Effect of Police Reform on Crime Variation (average) ReformRoboPatrimonial None40.7%36.2% Low22.3%34.4% Moderate39.1%19.5%
Determinants of rising crime Police Reform: No Evidence. Number of Police in the street: No evidence. –(R: -.39* with DF and R: -.15 without DF) Unemployment: No evidence. –(R: -08 ) Unemployment does correlate with patrimonial (vandalism) but in an unexpected direction (negatively). –(R: -37)
Initial Supporting Findings (Mexico) In the variation in the crime rate does correlate moderately with the crime rate at the onset. Crime has risen irrespective of Police Reform. The speed of rising criminality is faster where crime rates are higher
The role of Police Departments Crime increased more moderately where centralized police managed to still have a grip on its organization (Chile, Peru, Costa Rica, Nicaragua) Crime has increased sharply where descentralization allowed for the capturing of some states´police departments (Brazil, Mexico, Argentina Outliers: Venezuela
Concluding Remarks a) Crime has been increasing throughout the region. b) The lion’s share of this increase has been property crime. c) Violence became an additional resource used by criminal organizations. d) Property crime was driven by a strong demand for stolen goods.
(cont.) Concluding Remarks e) Organized crime expanded due to poor deterrence. f) Enforcement largely failed because sub- national governments were captured or were unable to deter. This fostered a vicious cycle (trajectory):