The Integration of Common Crime and Organized Crime in Latin

America

By Marcelo Bergman

CIDE Mexico

Hypothesis

The rise in crime has been caused by the increasing role of criminal organizations and the development of new markets for stolen goods.

Two Causes

The growth of organized crime is explained mainly by two variables:

a)The rapid growth of consumption of illegal goods

b) The fragmentation of states’

deterrence capacities

Homicides and Violent CrimeAll Homicide Rate

0

10

20

30

40

50

60

70

80

90

Years

No

. per

100

,000

Argentina

Belize

Bolivia

Brazil

Río de Janeiro (city)

Chile

Colombia

Colombia #2

Costa Rica

Ecuador

El Salvador

Guatemala

Mexico #2 (Zepeda, libro)

Nicaragua

Perú

Uruguay

Venezuela

Victimization rates in Latin AmericaVictimization Rate, 1995 & 2005*

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Countries

% r

ep

ort

ing

th

ey o

r fa

mil

y V

icti

miz

ed

1995

2005

(cont.) Victimization in Mexico

Personal Theft:Selected Items

0

20

40

60

80

purse celular computer clothing bicycle money other

2005

2008

(cases per 1,000)

Crime rates in ArgentinaCrime Rates in Argentina (per 100,000)

200

700

1200

1700

2200

propert crime arg. personal crime arg.

(cont.) Crime Rates in Mexico

Presuntos Delincuentes por 100,000 (Accused Criminals Per 100,000), Fuero Común y Federal

0

10

20

30

40

50

60

70

1926-1930

1931-1935

1936-1940

1941-1945

1946-1950

1951-1955

1956-1960

1961-1965

1966-1970

1971-1975

1976-1980

1981-1985

1986-1990

1991-1995

1996-2000

2001-2005

Periodo

Homicidio

Robo

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.

Car Theft: Argentina

Car Theft: Mexico

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)

Reform Robo Patrimonial

None 40.7% 36.2%

Low 22.3% 34.4%

Moderate 39.1% 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):