Criminal governance in times of crisis: Evidence from the COVID-19 outbreak in Rio de Janeiro

Abstract

In urban peripheries worldwide, and especially in Latin America, criminal groups use coercive power to impose rules on and provide order to civilians. The reasons why gangs govern in particular ways, or at all, are poorly understood. Many charge taxes in exchange for governance provision—suggesting they act as stationary bandits— but some do not. Many control retail drug markets, but some also earn rents from licit goods and services like cooking gas and internet. During the COVID-19 crisis, anecdotes of gangs enforcing lockdowns and providing health-related public goods suggested they seized opportunities to consolidate their authority and perceived legitimacy. We present novel, systematic data on criminal governance practices in Rio de Janeiro, whose gangs are notoriously militarized, persistent, and—usefully, from our perspective—diverse. While many belong to prison-based drug syndicates, others are police-linked groups known as mil´ıcias. We surveyed residents from almost 200 favelas about local gangs’ type, economic and governance activities, taxation, and pandemic response. Contrary to expectations, we find that drug gangs and mil´ıcias alike earn rents from a range of licit products and services, enjoy similarly high levels of perceived legitimacy, and largely avoided involvement in pandemic response. Yet milicias are far more likely to tax, and seldom sell drugs. Our findings suggest that gangs’ core motives are economic rather than political, that they strategically distinguish between direct taxation and extracting monopoly rents from control over utilities.