The Integration of Common Crime
and Organized Crime in Latin
America
By Marcelo Bergman
CIDE Mexico
Hypothesis
The rise in crime has been caused by the
increasing role of criminal organizations
and the development of new markets for
stolen goods.
Two Causes
The growth of organized crime is explained
mainly by two variables:
a)The rapid growth of consumption of
illegal goods
b) The fragmentation of states’
deterrence capacities
Homicides and Violent Crime
All Homicide Rate
90
80
Argentina
Belize
70
Bolivia
Brazil
Río de Janeiro (city)
No. per 100,000
60
50
Chile
Colombia
40
Colombia #2
Costa Rica
Ecuador
30
20
El Salvador
Guatemala
10
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
19
91
0
Mexico #2 (Zepeda, libro)
Nicaragua
Perú
Uruguay
B
rg
en
tin
a
Countries
er
ú
U
ru
gu
ay
V
en
ez
ue
la
P
ol
iv
ia
B
ra
zi
l
C
hi
le
C
ol
om
bi
C
a
os
ta
R
ic
a
E
cu
ad
E
or
lS
al
va
do
r
M
ex
ic
o
N
ic
ar
ag
ua
A
% reporting they or family Victimized
Victimization rates in Latin America
Victimization Rate, 1995 & 2005*
70.00%
60.00%
50.00%
40.00%
1995
2005
30.00%
20.00%
10.00%
(cont.) Victimization in Mexico
Personal Theft:Selected Items
(cases per 1,000)
80
60
2005
40
2008
20
0
purse
celular
computer
clothing
bicycle
money
other
Crime rates in Argentina
Crime Rates in Argentina (per 100,000)
2200
1700
1200
700
personal crime arg.
20
07
20
05
20
03
propert crime arg.
20
01
99
97
95
93
91
200
(cont.) Crime Rates in Mexico
Presuntos Delincuentes por 100,000 (Accused Criminals Per 100,000),
Fuero Común y Federal
70
Homicidio
60
Robo
50
40
30
20
10
0
1926-1931-1936-1941- 1946-1951-1956-1961- 1966-1971-1976-1981- 1986-1991-1996-20011930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Organized Crime: Defined
• “[…] loosely affiliated networks of criminals who
coalesce around certain criminal opportunities”
• “The predominant forms of organized crimes
exist to provide goods and services that are
either illegal, regulated, or in short supply.
It is the presence of one or more of these
limiting conditions and a desire by a large
enough segment of society for the particular
goods and services that make their provision a
profitable business” (Finckenauer 2008 p 67)
(cont.) Organized Crime: Defined
society’s Demand for goods
+
restricted Supply for goods
(through legal means)
=
Organized Crime
becomes the illegal supplier
Common Crime and Organized
Crime
• Development of new markets for stolen
goods
• Easy recruitment of “cheap labor”
• Multiple models and fluid connections
• Horizontal integration
Car Theft: An Example
•Car theft as organized crime.
•Close to 1,000,000 cars are stolen every year
in the region.
•A $3-5 billion dollar market.
•The structure and organization.
Car Theft: Argentina
Stolen cars in Argentina
50
40
30
20
10
0
-10
2004
2005
2006
% change (2004)
2007
2008
rate of violence
2009
Car Theft: Mexico
Car Theft of Insured vehicles in mexico
65
45
35
25
15
stolen insured
found insured
8
6
4
2
20
00
98
96
94
92
5
90
1,000
55
Organized Crime in Latin America
(supply side)
• structurally-differentiated by functions and
trades.
• loosely connected and multiple players.
• competition and fragmentation.
• participation by state actors.
Fragmentation of Deterrence
• a) Transitions to democracy?: No
• b) Federalism?: To some extent
Why Organized Crime Exploded?
(Economy)
• The Drug Trafficking Problem
• The proliferation of Piracy and
counterfeiting (cheap technologies)
• The fragmentation of markets and the
expansion and the reduction of trade
barriers
• Low labor cost
Why Organized Crime Exploded?
(Institutional)
• Who has the upper hand? Police or crime
ring leaders?
• Critical mass and tipping point
• The “capture” of law enforcement
agencies
Police Reform in Mexican States
The Effect of Police Reform on
Crime Variation (average)
Reform
Robo
Patrimonial
None
40.7%
36.2%
Low
22.3%
34.4%
Moderate
39.1%
19.5%
Determinants of rising crime
• Police Reform: No Evidence.
• Number of Police in the street: No evidence.
– (R: -.39* with DF and R: -.15 without DF)
• Unemployment: No evidence.
– (R: -08 )
• Unemployment does correlate with
patrimonial (vandalism) but in an unexpected
direction (negatively).
– (R: -37)
Initial Supporting Findings
(Mexico)
• In the variation in the crime rate does
correlate moderately with the crime rate at
the onset.
• Crime has risen irrespective of Police
Reform.
• The speed of rising criminality is faster
where crime rates are higher
The role of Police Departments
• Crime increased more moderately where
centralized police managed to still have a
grip on its organization (Chile, Peru, Costa
Rica, Nicaragua)
• Crime has increased sharply where
descentralization allowed for the capturing
of some states´police departments (Brazil,
Mexico, Argentina
• Outliers: Venezuela
Concluding Remarks
a) Crime has been increasing throughout the
region.
b) The lion’s share of this increase has been
property crime.
c) Violence became an additional resource
used by criminal organizations.
d) Property crime was driven by a strong
demand for stolen goods.
(cont.) Concluding Remarks
e) Organized crime expanded due to poor
deterrence.
f) Enforcement largely failed because subnational governments were captured or
were unable to deter.
This fostered a vicious cycle (trajectory):