Introduction
Democracy requires self-governance and equal citizenship. In Latin America, these ideals have faced persistent challenges (Przeworski 2010). In the past, military regimes and insurgent movements posed the greatest threats to democracy; today, criminal organizations represent a growing challenge. While these groups primarily aim to control illicit markets, their activities differ significantly across countries. In Mexico, Brazil, or Colombia, criminal organizations often extend their influence into social and political spheres. Existing research has largely focused on understanding these cases. While this research has enriched our understanding of criminal governance, it has overlooked instances where governance appears limited to the control of illicit markets without extending into broader social or political control.
Through the examination of the case of Uruguay, we argue that political parties, as agents of representation, have the capacity to reduce the opportunities for criminal groups to act as alternative providers of resources and authority. Our analysis suggests that the extent to which criminal governance expands beyond illicit markets depends on the capacity of political parties to address social demands and grievances. While security policies help contain criminal groups, they are most effective when combined with responsive political representation and welfare initiatives. This raises a broader question: Is Uruguay experiencing an early stage of criminal governance that may evolve into a more complex form? Or does it represent a distinct expression of the phenomenon?
Criminal Governance and Violent Democracies
Latin American democracies are characterized by violence and the exclusion of vast sectors of the population (Arias and Goldstein 2010). Throughout the 20th century, non-elected actors posed significant threats to democracy. The military intervened to protect economic elites whenever expanding political and social rights challenged the status quo (O’Donnell 1973). Insurgent movements also threatened the status quo by viewing democracy as flawed and, in some cases, violently controlling territory and populations to effect change (Wood 2008; Arjona 2016).
During the third wave of democratization, many countries transitioned to competitive regimes as military and insurgent threats declined. Democratization in the 1980s formally guaranteed civil and political rights while social policies in the 1990s and 2000s expanded to marginalized sectors (Garay 2017). However, these reforms did not fundamentally alter the region’s deep social fragmentation and structural inequalities. Democracy remains constrained: civil and political rights alone cannot guarantee equal participation when basic needs are unmet (Marshall 1950); and deep fragmentation weakens political parties’ ability to represent opposing interests effectively.
Latin American parties have historically struggled to aggregate societal preferences (Roberts 2014; Levitsky et al. 2016; Luna et al. 2021). While the third wave did not witness widespread coups d’état, democracies continue to face substantial challenges in terms of stability, legitimacy, and representation. Despite broad support for democracy, many citizens remain dissatisfied with its functioning, leading to cycles of protests, party collapses, presidential mandate interruptions, rising violence, and the emergence of illiberal leaders (Luna 2024; Pérez Bentancur, Piñeiro Rodriguez, and Rosenblatt 2025). This crisis of representation and legitimacy creates space for criminal organizations to expand their influence, filling the void left by weakened democratic actors.
Criminal organizations pose a distinct threat compared to other undemocratic actors. While 20th-century violence was primarily political, and violent actors sought to alter political regimes, 21st-century violent actors primarily contest control over illicit markets, with politics playing a subsidiary role (Trejo and Ley 2020; Durán-Martínez 2018; Arias 2017). Unlike rebels and militaries, criminal organizations do not seek to control politics to build an alternative regime (Kalyvas 2015). Rather, they take advantage of political power to profit from illicit markets.
In pursuing economic interests, criminal organizations reshape local governance. As they entrench themselves in communities, their control over illicit markets expands into social and political spheres, building criminal governance—the regulation of community behaviors for profit through coercion and service provision. This process deepens social exclusion, restricting civil and political rights and curbing citizens’ autonomy. The violence they generate—through assassinations, forced disappearances, and attacks on activists and journalists—fuels anti-democratic preferences for violent state responses (Masullo and Morisi 2024), creating a self-perpetuating cycle of violence. As a result, democracy is further undermined as control over the polity shifts away from legitimate elected actors.
Constrained Criminal Governance
Criminal governance operates within the state, not in its absence (Lessing 2020). Criminal organizations require the state to function, but the degree of overlap—the expansiveness of the “gray zone of criminality”—varies significantly, both across and within countries (Trejo and Ley 2020; Feldmann and Luna 2023; Trejo, Tiscornia, and Albarracín, forthcoming). Most research has focused on contexts with extensive gray zones, such as Mexico, Brazil, and Colombia (Arias 2017; Durán-Martínez 2018; Lessing 2017; Barnes 2025). In these settings, criminal governance extends beyond illicit markets to political, judicial, social, and fiscal spheres (Lessing 2020). Criminal organizations often exercise economic control by extorting local businesses and imposing informal taxation systems to community residents (Moncada 2022). They also often exert social control through curfews, behavioral restrictions, and extrajudicial punishments. Furthermore, they sometimes impose political control, interfering in elections through intimidation, vote-buying, and alliances with politicians who benefit from their financial and territorial control (Albarracín 2018). In some cases, they penetrate municipal governments, law enforcement, and judicial systems, securing legal protection and limiting state intervention (Trejo and Ley 2020).
While research on criminal governance in Latin America has advanced our understanding of the phenomenon, it does not fully explain its variations. Studies on Argentina, Chile, and Uruguay suggest that criminal governance differs from patterns observed in more violent contexts (Auyero and Sobering 2019; Flom 2019; Feldmann and Luna 2023). Our research in Uruguay shows that while criminal groups are prevalent in Montevideo, their activities largely remain confined to illicit markets (Fynn, Pérez Bentancur, and Tiscornia 2024; Tiscornia et al. 2024). These groups are concentrated in lower-income neighborhoods and often originate from families that transitioned from petty crime to drug trafficking. They employ both violent and nonviolent activities to regulate illicit markets.
Criminal groups’ presence amplifies violence and insecurity in affected neighborhoods. Homicides and violence, fights, shootings, and robberies heighten public fears, leading to restricting mobility. In extreme cases, clashes between groups or with police disrupt public transport, isolating communities (Tiscornia and Pérez Bentancur 2022). This violence disrupts daily life, limiting access to schools, public spaces, and community centers (Fynn 2025).
Criminal organizations also engage in nonviolent activities to maintain control over illicit markets. They exploit gaps in state service provision by offering immediate, tangible benefits that the state struggles to deliver efficiently—such as donating sports equipment, covering utility bills, or providing gas stoves. They also offer precarious jobs in the drug trade, including roles as lookouts, mules, and hitmen (Tiscornia et al. 2024).
Despite their violent influence, criminal groups in Montevideo primarily regulate illicit markets rather than exert broader social or political control. Our data shows that residents rarely seek their intervention in cases of robberies or community violence. Instead, they turn to the state—particularly local public services such as schools, childcare centers, healthcare facilities, and municipal offices—to address issues related to criminal violence. This reliance underscores the state’s continued legitimacy in these neighborhoods.
Our research suggests that in Montevideo, criminal governance remains limited to illicit market regulation without extending into social or political domains. While criminal groups create negative externalities such as mobility restrictions and insecurity, these effects are byproducts of their market control efforts (Fynn 2025; Fynn, Pérez Bentancur, and Tiscornia 2024). This raises a critical question: how does criminal governance operate in a context with extensive state presence and strong democratic institutions?
There are two possible explanations for the type of criminal governance observed in Uruguay. It could be an early stage of development that may evolve into more complex structures, like those in Colombia, Mexico, or Brazil. Or it may be a distinct model shaped by specific interactions between communities, criminal groups, and the state. Our research supports the latter (Fynn, Pérez Bentancur, and Tiscornia 2024; Tiscornia et al. 2024). In Uruguay, criminal governance works within a consolidated democracy, a strong welfare state, and an institutionalized party system with strong links with society (Piñeiro and Rosenblatt 2018; Pribble 2013).
Existing research typically frames the state’s role in criminal governance through two lenses: its absence or its punitive capacity. Some argue that criminal governance emerges in areas where the state is weak or absent (Gambetta 2007; Skaperdas 2001; Yashar 2018), while others contend that strong punitive policies can inadvertently strengthen criminal organizations by, for example, fostering their reorganization within prisons (Dipoppa 2024; Lessing 2017). While state capacity is crucial, the role of political parties as legitimate agents of representation remains underexplored. Political parties can limit criminal governance when they effectively channel citizens’ demands and provide responsive policies. Thus, while security policies—including policing and judicial interventions—are necessary components of state action against criminal organizations, they are not sufficient on their own, and, as research has extensively demonstrated, they can be counterproductive (Magaloni, Franco-Vivanco, and Melo 2020).
We argue that the extent to which criminal governance expands beyond illicit markets depends not only on security policies but also on the capacity of political parties to address social demands and grievances. When both are present, criminal governance remains confined to market regulation, with minimal influence over social or political life. Political parties, as intermediaries between the state and society, play a crucial role in incorporating marginalized populations’ demands into formal political agendas, preventing their co-optation by criminal organizations. By effectively representing these sectors and implementing welfare policies (Blattman et al. 2021), political parties help sustain state legitimacy and limit criminal groups’ influence in community affairs.
Security policies have played a crucial role in containing the expansion of criminal organizations through measures such as incarceration, drug confiscation, and targeted crackdowns (Bogliaccini et al. 2022). While these interventions prevent the emergence of more complex criminal organizations by fragmenting them, they also contribute to the proliferation of smaller groups competing for control of illicit markets, fueling community violence.
Conclusions
Because criminal governance is linked to the dynamics of global illicit markets, it is very hard to eradicate (Feldmann and Luna 2023). Yet, states and political parties retain agency in shaping local manifestations of criminal governance. The case of Uruguay shows that robust welfare and security policies, along with strong political representation through parties, can limit the expansion of criminal governance, preventing its entrenchment into other social spheres.
The broader Latin American context presents a different reality. Weakly institutionalized parties with limited representational capacity struggle to channel citizens’ demands. We have argued that this weakness creates space for criminal organizations to expand beyond illicit markets, infiltrating social, political, and economic spheres. While political parties should serve as legitimate intermediaries, their ability to represent diverse interests is often constrained by structural inequalities. Governance gaps emerge when parties fail to aggregate demands effectively, allowing criminal actors to embed themselves in local power structures. As such, criminal governance is not the root cause of democratic deficits, it is a manifestation of deeper structural problems.