Criminal groups govern millions worldwide. Even in strong states, gangs resolve disputes and provide security. Why do these duopolies of coercion emerge? In many cases, gangs fill vacuums of official order. If so, increasing state presence should crowd out criminal governance. In this paper, however, we show that state and gang rule are sometimes complements. In particular, gangs can deter state predation by keeping neighborhoods orderly and loyal. If true, increasing state presence could increase gang rule. We investigate in Medellín, Colombia. Criminal leaders told us they rule mainly to protect drug rents. We test gang responses to state presence using a geographic discontinuity. Internal border changes in 1987 assigned some blocks to be exogenously closer to state security for three decades. Gangs responded to closer state presence by increasing governance services, but primarily in neighborhoods with the greatest potential drug rents. This suggests new strategies for countering criminal governance.

More on this topic

BFI Working Paper·Mar 10, 2025

The Value of Clean Water: Experimental Evidence from Rural India

Fiona Burlig, Amir Jina, and Anant Sudarshan
Topics: Development Economics, Energy & Environment
BFI Working Paper·Feb 18, 2025

The Price of Faith: Economic Costs and Religious Adaptation in Sub-Saharan Africa

Eduardo Montero, Dean Yang, and Triana Yentzen
Topics: Development Economics
BFI Working Paper·Jan 21, 2025

Disease, Disparities, and Development: Evidence from Chagas Disease Control in Brazil

Jon Denton-Schneider and Eduardo Montero
Topics: Development Economics, Health care