Building Resilience Against Organized Crime

In remarks given at the Interregional Dialogue on Organized Crime and State-Capture, Vanda Felbab-Brown speaks on illegal economies and the threats they pose to states and societies.  

Organized crime and illegal economies generate multiple threats to states and societies. They often threaten public safety, at times even national security. Illicit economies can compromise political systems through increased corruption and penetration by criminal entities, undermine the legal economies, and eviscerate the judicial and law enforcement capacity of states.

The Functions of Illegal Economies and Criminal Entities

At the same time, large populations around the world in areas with inadequate or problematic state presence, great poverty, and social and political marginalization are dependent on illicit economies, including the drug trade, for economic survival and the satisfaction of other socio-economic needs. For many, participation in informal economies, if not outright illegal ones, is the only way to satisfy their human security and provides any chance of their social advancement, even as they continue to exist in a trap of insecurity, criminality, and marginalization. The more the state is absent or deficient in the provision of legal jobs and public goods – starting with public safety and suppression of street crime and including the provision of dispute resolution mechanisms and access to justice, enforcement of contracts, and also socio-economic public goods, such as infrastructure, access to health care, and education – the more communities are  susceptible to becoming dependent on and supporters of criminal entities and belligerent actors who sponsor the drug trade and other illegal economies.

Especially by sponsoring labor-intensive illicit economies, criminal and belligerent actors provide public goods, suboptimal as they may be: First, they provide employment in the illegal economy. In the case of illicit crop cultivation, these job opportunities are often extensive, generating employment for hundreds of thousands, if not millions of people in particular locales. Other aspects of the drug trade, such as processing, smuggling, or the production of synthetic drugs are considerably less labor-intensive, but nonetheless generate spillovers that often foster economic activity, such as retail of consumer goods. This ability to provide employment is all the more significant in places where political-economic arrangements, such as taxation systems, weak fiscal capacity, limited access to education, and monopolistic economic and political setups often fail to create jobs even at times of economic growth.

Second, both criminal entities and belligerent groups also often provide security. Of course, they are sources of insecurity and crime in the first place, but they often regulate the level of violence, suppress street crime, such as robberies, thefts, kidnapping, and even homicides. Functioning as an order and rule provider brings criminal entities important support from the community, in addition to facilitating  illegal business since that too benefits from reduced transaction costs and increased predictability. Organized criminal groups and belligerent actors also provide dispute resolution mechanisms and even set up unofficial courts and enforce contracts – be they the Primeiro Comando da Capital (PCC)  drug gang in Sao Paolo’s shantytowns, the mafia in Sicily, or the Taliban in Afghanistan. They also provide socio-economic public goods, such as roads and health clinics. The extent to which they provide these public goods varies, of course, but their provision often takes place regardless of whether the non-state entities are politically-motivated actors or criminal enterprises. The more they do so, the more they become de facto proto-state governing entities.

In turn, such groups obtain not only large financial benefits from their participation in illegal economies, but also large political capital – support from the population and even identification of the population with these criminal and other nonstate entities. Their political capital and ability to act as protostates increase the more they transform themselves into polycrime franchise enterprises and also acquire control of informal economies, in addition illegal ones.

Thus, much of the debate about whether an actor is a political actor or a criminal actor is often misguided. Of course, it is critical to have a good intelligence picture and strategic understanding of a group, including its motivations, objectives, and structures. However, even criminal organizations obtain political capital if they sponsor illicit economies and distribute patronage and public goods in a way that outperforms the state. Moreover, most organized crime actors have at least minimal political goals, such as to influence local economic, political, law enforcement, and judicial structures in a way that is conducive to the preservation of their business.

It is important to remember that when the drug trade or other organized crime rackets arrive in a new place they rarely encounter innocent virgin land with no experience in illegality or rents. Sometimes that may be the case, such as when illegal loggers for the first time encounter indigenous groups in the Brazilian Amazon that have had no previous exposure to civilization. But in most other cases, both the state and the society have preexisting susceptibility, proclivity, and resilience to particular illicit economies, and crime-state political arrangements. Many societies have a deep and long history of knowledge of and participation in illegal and criminal enterprises. Participating in criminal economies may be seen as illegal, but not illegitimate. Local context – local institutional arrangements and cultural settings – will critically influenced the design and effectiveness of the anti-crime policies.

In much of West Africa, for example, political contestation has centered on taking over the state to capture rents. The state would then define (or redefine) what constitutes illegal economic behavior and selectively issue exemptions from law enforcement and prosecution to families, friends, and its network of clients. Fearing internal coups and yet facing little external aggression even in the context of very porous borders, many ruling elites in West Africa after independence systematically allowed their militaries and law enforcement institutions to deteriorate.

Competition in State-Making

 It is thus important to stop thinking about crime solely as aberrant social activity to be suppressed, but also to think of crime as a part of the competition in state-making. In strong states that effectively address the needs of their societies, the non-state entities cannot outcompete the state on a large scale. But in areas of socio-political marginalization and poverty, nonstate entities do often outcompete the state and secure the allegiance and identification of large segments of society.

While non-state entities can thus outcompete the state in governance in areas of marginalization, it is also important to note that states, especially weak and unaccountable states, also often use crime and criminal entities for their purposes, including to strengthen their ruling power structures. Criminal entities also of course seek not just to dominate society, but also to control or at least influence the state and its ruling power arrangements.

In such areas of state weakness and underprovision of public goods, the effective state strategy toward organized crime is thus not simply one of law-enforcement suppression of crime. Approaches such as mano dura policies, saturation of areas with law enforcement officers, especially if they are corrupt and inadequately trained, or highly repressive measures rarely tend to be effective in suppressing organized crime and often only attack the symptoms of the social crisis, rather than its underlying conditions.

Designing an Effective Response

An appropriate response to the proto-state role of criminal entities is a multifaceted state-building effort that seeks to strengthen the bonds between the state and marginalized communities dependent on or vulnerable to participation in the illicit activity for reasons of economic survival and physical insecurity. Thus, the goal of supply-side measures in counternarcotics efforts should not only be to narrowly suppress the symptoms of illegality and state-weakness, such as illicit crops or smuggling, but also  to reduce the national security threat that the drug trade appears to  pose o a public safety problem that does not threaten the state or the society at large.

Such a multifaceted approach requires that the state address all the complex reasons why populations turn to illegality, including law enforcement deficiencies and physical insecurity, economic poverty, and social marginalization.  Efforts need to focus on ensuring that peoples and communities will obey laws – by increasing the likelihood that illegal behavior and corruption will be punished, but also by creating the social, economic, and political environment in which the laws are consistent with the needs of the people so that the laws can be seen as legitimate and hence be internalized.

In the case of narcotics suppression, one aspect of such a multifaceted approach that seeks to strengthen the bonds between the state and society and weaken the bonds between marginalized populations and criminal and armed actors is the proper sequencing of eradication and the development of economic alternatives. For many years, the United States has emphasized eradication of illicit crops, including forced eradication, above rural development, such as alternative livelihoods efforts. Moreover, the United States has also insisted on eradication first. Such an approach has been at odds with — in fact, the reverse of — the counternarcotics policy of the European Union and many individual Western European countries. Such sequencing and emphasis has also been at odds with the lessons learned from the most successful rural development effort in the context of illicit crop cultivation, Thailand. Indeed, Thailand offers the only example where rural development succeeded in eliminating illicit crop cultivation.

Effective economic development – be it for urban or rural spaces – does require not only proper sequencing with suppression policies and security, but also a well-funded, long-lasting, and comprehensive development approach that centers on the creation of legal jobs. Indeed, legal job generation is always the single hardest developmental challenge —whether in Pakistan’s tribal areas or Johannesburg shantytowns. Moreover, development efforts need to address all the structural drivers of why communities participate in illegal economies — such as access to markets and their development, deficiencies in infrastructure and irrigation systems, access to microcredit, and the establishment of value-added chains.

It is important, however, that such social interventions are designed as comprehensive rural development or comprehensive urban planning efforts, not simply limited handouts or buyoffs. The latter approaches have failed – whether they were conducted in Medellín as a part of the demobilization process of the former paramilitaries many of whom have returned as bandas criminales or in Rio’s favelas. The handout and buyoff shortcuts often also paradoxically strengthen criminal and belligerent entities and set up difficult-to-break perverse social equilibria where criminal entities continue to control marginalized segments of society while striking a let-live bargain with the state, under which criminal actors even control territories and limit state access.

An effective multifaceted response by the state also entails other components:

· addressing street crime to restore communities’ associational capacity and give a boost to legal economies;

· providing access to dispute resolution and justice mechanisms – Colombia’s casas de justicia are one example;

· encouraging protection of human rights, reconciliation, and nonviolent approaches;

· improving access to effective education as well as health care – a form of investment in human capital;

· insulating informal economies from takeover by the state and limiting the capacity of criminal groups to become polycrime franchises;

· and creating public spaces free of violence and repression in which civil society can recreate its associational capacity and social capital.

Boosting the capacity of communities to resist coercion and cooptation by criminal enterprises, however, does not mean that the state can rely on communities themselves to tackle crime, especially violent organized crime, on their own. In fact, there is a great deal of danger in the state attempting to mobilize civil society to take on crime prematurely while the state is not still capable of assuring the protection of the people. Without the state’s ability to back up communities and secure them against violence by organized crime or militancy, the population will not provide intelligence on the criminals to the state. And actionable and accurate human intelligence is often critical for success of not only counterinsurgency, but also anti-organized crime efforts. Equally significant, the community can all the more sour on the state. It will then be very hard for the state to mobilize civil society the second time around and restore trust in state capacity and commitment. Mistakes are very costly.

A concentration of resources, in both non-corrupt law enforcement and socio-economic efforts to strengthen communities, often improves the chance that the state will succeed in such a complex undertaking. It is often very hard politically to concentrate resources and tackle organized crime neighborhood-by- neighborhood and illegal economies municipality- by- municipality. But spreading resources over extensive areas – as much as they may be acutely in need of intervention – without achieving a necessary law enforcement and socio-economic development momentum in any place– greatly augments chances of failure.

Critically, the associational and organizational capacity and social action potential of communities is eviscerated very quickly during intense violence. It may well be that the narcos are killing each other, but when they do so on streets of cities or rural areas where the population lives, they also hollow out the communities. The bullets may only be flying overhead, but they are still deeply injuring the community underneath. Often, success hinges on the state’s ability to bring violence down: without a reduction in violence, socio-economic interventions do not have a chance to take off and even institutional reforms become difficult to sustain as political support weakens.

All such social interventions require careful and consistent monitoring and the ability to correct and restructure policy that is not effective. Both the monitoring and policy adaptation are often very difficult to institutionalize effectively. It is critical to remember that inadequate implementation can kill the best strategy. Effective implementation depends on how operationalization corresponds to local cultural and institutional settings.

It is unrealistic to expect that outside policy interventions can eradicate all organized crime and illicit economies or for that matter of all the drug trade. The priority for the United States and the international community does need to focus on the most disruptive, dangerous networks: those with the greatest links or potential links to international terrorist groups with global reach and those that are most rapacious and predatory to the society and the legitimate state and who most concentrate rents from illicit economies to a narrow clique of people. These two criteria may occasionally be in conflict and pose a difficult dilemma. In addition to considering the severity of the threat posed to the international community and to the host state and society, the estimated effectiveness of policy intervention with respect to each type of groups needs to be factored into the analysis of such policy choices.

It is important to realize that indiscriminate and uniform application of law enforcement – whether external or internal – can generate several undesirable outcomes: First, the weakest criminal groups can be eliminated through such an approach, with law enforcement inadvertently increasing the efficiency, lethality, and coercive and corruption power of the remaining criminal groups operating in the region. Second, such an application of law enforcement without prioritization can indeed push criminal groups into an alliance with terrorist groups – the opposite of what should be the purpose of law enforcement and especially outside policy intervention. Both outcomes have repeatedly emerged in various regions of the world as a result of opportunistic, non-strategic drug interdiction policies.

The international community and the United States need to engage in law enforcement, counternarcotics, and counterterrorism assistance with extreme caution. A do-no-harm attitude and careful evaluation of the side-effects of policy actions need to prominently figure in policy considerations.

There are multiple dangerous risks in rushing to action. First of them is the danger that with minimal presence of the United States and the international community on the ground, U.S. or internationally-trained law enforcement forces will “go rogue” and the international community will only end up training more capable drug traffickers or coup forces.

Second, there is a not-insubstantial risk that some governments will come to see international counternarcotics or anti-org crime aid as yet another form of rent to be acquired for their power and profit maximization, in the same way that they had often seen anti-Communism or counterterrorism aid. Such funds can be diverted for personal profits; or worse yet against domestic political opposition, and undermine institutional development and effective and accountable governance in the region.

Third, building up law enforcement capacity and intervening against illicit economies may often been perceived by local populations as antagonistic to their interests.

The United States and the international community can reduce these dangers through two overarching guiding principles. First, international assistance should be carefully calibrated to the absorptive capacity of the partner country. In places where state capacity is minimal and law enforcement often deeply corrupt, an initial focus on strengthening the police capacity to fight street crime, reducing corruption, and increasing the effectiveness and reach of the justice system may be the optimal initial interventions. Only once careful monitoring by outside actors has determined that such assistance has been positively incorporated, will it be fruitful to increase assistance for anti-organized crime efforts, including advanced-technology transfers and training. Careful monitoring of all anti-organized-crime programs — including their effects on the internal political arrangements and power distribution within the society and their intended effects on the power of criminal groups and their links to terrorist groups — needs to be consistently conducted by outside actors.

Second, the international policy package needs to include a focus on broad state-building and the fostering of good governance, as described above. Policy interventions to reduce organized crime and to suppress any emergent crime-terror nexus can only be effective if there is a genuine commitment and participation by recipient governments.