Gang Rule: Understanding and Countering Criminal Governance*

Criminal groups govern millions of people worldwide. Even in strong states, gangs resolve disputes and provide security. Why do these duopolies of coercion emerge? Gangs often fill vacuums of official power, suggesting that increasing state presence should displace criminal governance. However, we show that state and gang governance are sometimes complementary. In particular, gangs may minimize seizures and arrests by keeping neighborhoods orderly and loyal. If this is true, increasing state presence could increase incentives for gang governance. In Medellín, Colombia, criminal leaders told us that they govern to protect drug proceeds from the police. We test gang responses to state presence using a geographic discontinuity. Internal boundary changes in 1987 assigned blocks to be closer to or further from state security over three decades. Gangs that were externally closer to state presence developed more governance over time. They did so primarily in neighborhoods with the highest potential drug revenues, suggesting new strategies to counter criminal governance.