Policy Enforcement in the Presence of Organized Crime: Evidence from Rio de Janeiro

37 Pages Posted: 23 Aug 2020 Last revised: 26 Oct 2021

See all articles by Raphael Bruce

Raphael Bruce

Insper Institute of Education and Research

Alexsandros Cavgias

University of Barcelona

Luis Meloni

University of São Paulo

Date Written: October 25, 2021

Abstract

How does territorial control by organized crime groups affect the enforcement of public policies? We answer this question by studying the enforcement of social distancing policies in Rio de Janeiro during the COVID-19 crisis. Two criminal groups with distinct governance have \textit{de facto} control over several areas of the city: drug trafficking organizations (DTOs) and paramilitary groups (PGs). While the former funds itself mainly through the drug business, where their consumer base lives outside their turfs, the second obtains most of its profits from extortion and illegal commerce of public services to citizens within their territories. This induces different responses to policies that reduce economic activity, such as those enacted in the pandemic. To answer our main question, we estimate difference-in-differences specifications that compare social distancing before and after the outbreak in areas with and without territorial control by these groups. We document that in areas controlled by PGs, distancing was smaller than in government-ruled areas. On the other hand, DTOs' turfs had similar social distancing to places controlled by the government. Our results suggest that the effect of organized crime on the enforcement of public policies depends on their form of criminal governance.

Keywords: Organized crime, policy enforcement, state capacity, COVID-19

JEL Classification: K42, I12, O17, R50

Suggested Citation

Bruce, Raphael and Cavgias, Alexsandros and Meloni, Luis, Policy Enforcement in the Presence of Organized Crime: Evidence from Rio de Janeiro (October 25, 2021). Available at SSRN: https://ssrn.com/abstract=3678840 or http://dx.doi.org/10.2139/ssrn.3678840

Raphael Bruce (Contact Author)

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

Alexsandros Cavgias

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

Luis Meloni

University of São Paulo ( email )

São Paulo, São Paulo
Brazil

HOME PAGE: http://luismeloni.com

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