Criminal Governance and Deregulatory Neoliberalism

More than 100 million people in Latin America live under forms of criminal governance. In the Buenos Aires metropolitan area, territorial disputes between gangs are no longer fought only with handguns: the use of homemade submachine guns reveals a new dimension of criminal violence in San Martín.

Criminal Governance and Deregulatory Neoliberalism

Criminal governance is the concept used to describe how illegal organizations come to exercise functions of government, creating a parallel social order that replaces, complements, or competes with the state. This is not simply an increase in crime, but the construction of parallel sovereignties: criminal groups establish the rules of the game in the territories they control, provide security, or ensure access to certain goods and services where the state fails to reach.

The Phenomenon

The phenomenon has reached continental proportions. A report by International IDEA and the School of Government of the Pontifical Catholic University of Chile argues that more than 100 million people in Latin America currently live under some form of criminal governance, directly affecting citizen security, trust in institutions, and the quality of democracy. The scale of the violence is equally striking: according to an analysis published by Prosegur Research, at least 108,838 people were killed during 2025, with a rate of approximately 17.6 homicides per 100,000 inhabitants.

For its part, the report Organized Crime and Violence in Latin America and the Caribbean, published by the World Bank in 2025, states that Latin America and the Caribbean have the highest average homicide rate in the world and account for approximately one-third of global homicides, despite representing only 9% of the world's population. All of this is occurring in a region that, broadly speaking, is not experiencing conventional wars.

The market-oriented reforms implemented across much of Latin America during the 1990s profoundly altered the capacities and functions of states. Reductions in public spending, the deregulation of certain markets, and the retrenchment of state capacities in strategic areas created, in some territories, conditions that subsequently facilitated the expansion of illicit markets and of actors capable of challenging the state's monopoly on coercion.

The relationship between these two phenomena is not, however, mechanical or linear: organized crime responds to multiple causes and has demonstrated a remarkable capacity to adapt to different political and economic contexts. But the weakening of state capacities can open spaces that other actors are able to occupy. In territories where criminal governance emerges, state agents and illegal organizations interact in multiple ways, giving rise to alternative forms of regulation characterized by patrimonial relationships, corruption, protection, and high levels of opacity. These arrangements come into tension with the Weberian conception of the modern state and its claim to exercise a legitimate monopoly on violence.

Recognizing the role of neoliberal programs in transforming state capacities does not imply that the popular or progressive governments of Latin America, and particularly those in Argentina, have addressed this problem effectively. Often, the opposite has been true: their repeated failures to control certain territories, combat criminal economies, and build effective security policies have contributed to deepening the vacuum of responses to an increasingly complex problem.

It is in this context that “Bukele-style” solutions emerge, in which the radical right and its discourses of order, authority, and security increasingly present themselves as concrete alternatives for sectors of society subjected daily to violence and the advance of organized crime. The absence of a democratic security narrative and innovative policy proposals only expands that political space, allowing radical-right solutions to reproduce themselves as the only political imaginaries capable of restoring territorial control.

Argentina and Its Suburbs

In Argentina, the phenomenon takes on particular characteristics. Political scientist Benjamin Lessing argues that criminal governance does not necessarily imply the absence of the state, but can develop within broader spheres of state power, through relationships of interaction and, in some cases, symbiosis between state agents and criminal organizations. These relationships can take different forms, ranging from protection and corruption to informal arrangements of coexistence or cooperation.

In Rosario, for example, Javier Auyero and Katherine Sobering use the concept of the “ambivalent state” to describe territories where state action combines, in contradictory ways, law enforcement with clandestine relationships of protection, collusion, and regulation of illegal economies. It is therefore not a matter of an absent state, but rather of a state whose presence can simultaneously take punitive and permissive forms.

This ambivalence undermines state authority and deepens the crisis of legitimacy: do security forces combat organized crime, or are some of their agents part of the networks that protect it? Can the justice system guarantee an effective response when there are links between state actors and illegal markets? When these boundaries become blurred, citizens lose the ability to clearly distinguish between those who exercise state functions and those who participate in criminal organizations.

The result is doubly serious. On the one hand, there is a disincentive to report crimes when citizens perceive that the institutions responsible for preventing, investigating, and punishing them cannot guarantee an effective response. On the other, there is a progressive loss of control over shared public space: plazas, streets, clubs, schools, and other places of encounter and socialization. This introduces a territorial dimension to the phenomenon and allows it to be understood also as a form of loss of sovereignty within a country's own borders.

Community socialization loses ground when state action is ineffective, intermittent, or contradictory. And this loss of common space is not a minor consequence: it weakens the social networks that sustain community life and makes it easier for other actors to occupy those spaces and establish their own rules there. There are no empty spaces: what the state and the community abandon can be occupied by organized crime.

Contemporary criminality, moreover, can no longer be reduced to drug trafficking or traditional criminal structures. It operates through flexible and adaptive networks, capable of intervening simultaneously in different illicit markets and combining activities such as drug trafficking, extortion, money laundering, informal lending, illegal commerce, and territorial control.

This complexity is beginning to become visible in the province of Buenos Aires, whose criminal dynamics cannot be analyzed in isolation from the territorial and economic links it maintains with Santa Fe. Addressing this problem exclusively through provincial and municipal boundaries is insufficient: criminal organizations operate across administrative jurisdictions and take advantage precisely of the difficulties of coordination between different levels of government.

San Martín, the Thermometer of a Crisis

The municipality of San Martín, in the heart of the Buenos Aires metropolitan area, has become a case study in the expansion of violence associated with illegal drug markets. The district provides a territorial-scale view of some of the dynamics described throughout this article: disputes over territorial control, the circulation of weapons, criminal economies, lethal violence, and a growing difficulty for the state to ensure effective control of public space.

The numbers are telling. According to the latest report by the Observatory on Drug Trafficking and Associated Violence in San Martín, between January and June 2026, 22 intentional homicides and 30 highly injurious incidents were recorded. Homicides increased by 29.4% compared with the first half of 2025, while highly injurious incidents rose by 50%.

Of all the incidents recorded, 46% of the victims whose age could be established were between 16 and 25 years old. Seventy-seven percent of homicides and 80% of highly injurious incidents were linked to drug trafficking. Among the latter, moreover, 58% of cases connected to illegal drug markets were associated with territorial disputes.

The violence is not an isolated phenomenon. In 2025, San Martín already recorded one of the highest homicide rates in the province: 5.57 per 100,000 inhabitants, compared with a Buenos Aires provincial average of 4.6. During the first quarter of 2026, the district recorded 20 intentional homicides, equivalent to 48.8% of all homicides recorded throughout 2025. The quarterly rate reached 4.44 homicides per 100,000 inhabitants, more than three times the provincial average for that period.

On August 7, a shootout between two gangs and police officers near downtown San Martín once again highlighted a new dimension of the conflict. These confrontations are no longer fought solely with handguns: during subsequent raids, authorities seized two homemade submachine guns and a magazine capable of holding 50 rounds, evidence of a significant increase in the volume of fire available to organizations linked to street-level drug dealing. The incident cannot simply be read as an episode of ordinary crime: it is part of a territorial dispute between groups competing for control of illegal markets and beginning to display increasingly greater firepower.

In San Martín, the expansion of street-level drug dealing found in the Reconquista Area an ecosystem conducive to its reproduction, a territory marked by conditions of vulnerability, urban segregation, and an uneven state presence. There, the figure of the tranza has also evolved: no longer appearing solely as a drug dealer, the tranza may also act as a lender, service provider, intermediary, and territorial broker.

For some young people, moreover, the figure of the narco can represent a path not only to economic income, but also to prestige, recognition, and respect, particularly where legal avenues for social mobility appear restricted. Research conducted in the territory itself shows precisely how these symbolic dimensions intersect with the expansion of illegal economies.

Traditional security policy tends to repeat itself: more police, more patrol cars, more operations. The same responses are applied again and again to a phenomenon that, nevertheless, is changing and acquiring new capabilities. The problem is not that police presence lacks importance, but that a strategy focused exclusively on security is insufficient to confront organizations that also contest territory, control markets, accumulate capital, corrupt institutions, and build forms of authority over certain sectors of society.

Faced with this reality, a change of approach is necessary. The proposed Restituted Assets Act, recently introduced in the Buenos Aires Provincial Chamber of Deputies, offers an example of how to broaden the strategy against organized crime beyond the strictly security-based dimension.

If criminal organizations also operate as economic structures capable of accumulating, managing, and reinvesting resources, the state must intervene in this dimension: identify, seize, and recover assets linked to illicit economies in order to prevent those resources from once again strengthening the criminal organizations themselves. Criminal prosecution and policing are necessary, but without a strategy aimed at stripping organized crime of its capital, its capacity for reproduction remains virtually intact.

Some Issues to Address

• Think about territory in terms of corridors, not municipalities. Criminal organizations do not respect administrative boundaries and coordinate their activities across different municipalities and provinces. The fragmentation of jurisdictions can be exploited to hinder investigations, criminal prosecution, and coordination among security forces.

• Develop a comprehensive disarmament policy. Reducing the circulation and availability of firearms within criminal networks is essential to reducing violence and restoring territorial control. The state needs a sustained policy combining prevention, oversight, investigation, and reducing the availability of firearms in the hands of criminal organizations.

• Strengthen prevention and the response to problematic substance use. The expansion of substance use requires a public response commensurate with its social and health dimensions. Security policy must incorporate a public health strategy capable of reducing the harms associated with substance use while also reducing the demand that sustains illegal markets.

• Address the economics of crime. Drug trafficking and other organized criminal activities constitute economic markets that generate income, accumulate capital, acquire assets, use financing mechanisms, and need to introduce those resources into the legal economy. The Ministry of Economy, financial intelligence agencies, and specialized asset-investigation units must be systematically incorporated into the strategy against organized crime.

• Build an employment and social mobility policy. The state must be able to offer concrete alternatives to the income, networks of belonging, and expectations of upward mobility that criminal economies can provide. This is not merely about creating welfare programs, but about guaranteeing employment, vocational education, training, and an income that makes it possible to build a life project outside criminal structures.

• Reclaim public space. There are no empty spaces. When plazas, streets, clubs, schools, and other places of encounter cease to be spaces for community use, the social networks that sustain collective life are weakened, making it easier for other actors to occupy that space. The recovery of public space must therefore be both a security policy and a strategy for rebuilding community life: lighting, infrastructure, sports and cultural activities, state presence, and neighborhood participation must accompany police operations.

• Treat school dropout as an emergency. Keeping young people in the education system must become a strategic priority of prevention policies. It is not enough to maintain enrollment: early signs of disengagement and dropout must be identified, support teams strengthened, and mechanisms created to bring back those who have already left the system. A long-term security policy is also built by preventing young people from being pushed out of school and left without prospects for the future.

• Prevent territories from becoming consolidated beyond the state's effective reach. No area can be subjected to a regime of criminal authority in which public institutions are unable to enter, remain, and perform their functions. It is not enough to reclaim a neighborhood through an operation: the entire state must remain after the operation and provide security, services, and rights there on a daily basis.

The public agenda on organized crime must cease to be a sector-specific concern and become a genuine state policy. Not only because criminal violence affects everyday security, but because it erodes the quality of democracy, undermines trust in institutions, and constrains any government's ability to exercise authority over its territory.

The paradox of the fight against organized crime is that much of the political leadership continues to offer familiar responses to a phenomenon that has changed in both scale and nature. More police officers and more patrol cars may be necessary, but they are not enough to confront organizations that also contest territories, control markets, accumulate capital, build protection networks, and create forms of parallel authority.

Breaking with this logic means ceasing to think of organized crime exclusively as a security problem and beginning to address it as a problem of sovereignty, economics, territory, and democracy. As long as the state continues to respond in a fragmented manner to organizations that operate in an integrated way, the Buenos Aires metropolitan area will remain the scene of a territorial struggle that the state has yet to fully understand and, for that very reason, has yet to win.