Decentralization and Criminal Gangs in El Salvador: Impacts on Municipal Finances and Local Economic Development.

Recent literature has argued that decentralization can create new forms of leverage for criminal gangs, increasing their territorial presence and levels of violence. In this article we reverse the causal arrow and analyze how gangs affect the performance of decentralized institutions. We study the c...

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Publicado en:Journal of Development Studies Vol. 60; no. 9; pp. 1372 - 1394
Autores principales: Eaton, Kent, Huanqui, Silvana, Larios, Jose
Formato: Artículo
Publicado: Taylor & Francis Ltd Sep2024
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: Sep2024
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      pub: Taylor & Francis Ltd
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        10.1080/00220388.2024.2339932
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        atl: Decentralization and Criminal Gangs in El Salvador: Impacts on Municipal Finances and Local Economic Development.
      aug:
        au:
          Eaton, Kent
          Huanqui, Silvana
          Larios, Jose
        affil:
          Politics, University of California, Santa Cruz, CA, USA
          Universidad del Pacífico, Lima, Peru
          División de Gestión Fiscal, Inter-American Development Bank, Washington, DC, WA, USA
      su:
        El Salvador
        Economic activity
        Federal government
        Cities & towns
        Local finance
        Capital investments
      sug:
        subj:
          Economic activity
          Federal government
          Cities & towns
          El Salvador
          Local finance
          Capital investments
      keyword:
        decentralization
        gangs
        municipal finance
        decentralization
        gangs
        municipal finance
      ab: Recent literature has argued that decentralization can create new forms of leverage for criminal gangs, increasing their territorial presence and levels of violence. In this article we reverse the causal arrow and analyze how gangs affect the performance of decentralized institutions. We study the case of El Salvador, a country with the ubiquitous presence of gangs. We find that the higher presence of gangs reduced municipalities' fiscal revenues, thereby increasing their dependence on transfers from the central government. This result is mostly driven by mid-size municipalities, as the effect is not significant for small and large municipalities. In addition to depressing revenues, gang presence was also associated with lower municipal spending and less service provision, effectively hollowing out municipal governance. The drop in municipal spending is particularly strong in capital spending and in small municipalities. The article also finds that gangs undermine economic activity – not just in the municipalities where they operate but through spill-over effects in neighboring jurisdictions as well.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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