Filling the Void? Organized Crime and COVID-19 in Rio De Janeiro

Abstract

How does the presence of organized crime affects the intensity of the COVID-19 epidemic? Rio de Janeiro is the perfect laboratory to answer such an overlooked question because two distinct types of criminal organizations operate in its territory. First, there are drug trafficking gangs comprised of slum dwellers. Second, there are the milícias, paramilitary groups with links to the police, usually financed by extortion. We estimate two-way fixed effects models comparing the number of cases (deaths) caused by Severe Acute Respiratory Syndrome (SARI) before and after the COVID-19 outbreak in neighborhoods with and without the presence of organized crime. We document two findings. First, the number of SARI deaths in neighborhoods controlled by gangs increased 43% less than in areas without any form of organized crime. In neighborhoods controlled by milícias, however, this outcome increased 29% more than areas without any form of organized crime. We find similar effects for SARI hospitalizations. These results are robust to various specifications. Overall, our results show that the reaction of organized crime to a public health crisis depends on its form of criminal governance.

Keywords: Organized crime, COVID-19

JEL Classification: K42, I12, O17, R50