 I'm going to present just a collection of works that we've been working on about organized crime in Medellin, co-authored with Chris Bladman, Gustavo Duncan, and also Ben Lessings, who some of you might know already. So this is not a paper. This is just a collection of findings, findings around different topics on criminal organizations in Medellin, and I'm going to focus on, for instance, business lines and internal organization of these groups, market structure of these groups, different forms of criminal collusion and as well as gang governance, and this builds on a broad literature on many of these topics that I'm not going to go into the details now, but are key references for our work. Where does this come from? Roughly six or more years of interviews. We've been interviewing more than a hundred gang members in Medellin repeatedly over the last four or five years, and we have also been working on collecting a lot of administrative data plus survey data to try to understand all these phenomena. So it's mostly distorted as a project without any hypothesis, but just like a collection of information so that we could figure out the right hypothesis and try to describe this phenomenon better. So the first topic is the context. So Medellin is a relatively large city, roughly four million people. It's the second largest city in the country, one of the nation's industrial commercial centers, annual income is roughly 11,000 per capita dollars, and it has like a relatively well-organized bureaucracy with high tax revenues, relatively well-developed public service. Some of you might have been around. It's not like a poor city, it's a relatively like middle income city in terms of compared to other cities in Colombia and Latin America, like a relatively like important kind of developed city. On top of that, it has roughly 400 small street gangs called COMBOS. We've been doing a census of these street gangs. They cover most or all of low and middle income neighborhoods in the city, and virtually like every inch of these neighborhoods is covered by or governed or has territorial control by some criminal organization, which as I mentioned are called COMBOS. So these are small street gangs that have existed for decades and have like well-defined borders and territories. And these gangs are part of a broader like hierarchy of crimes. So there are 400 COMBOS at the bottom of this pyramid that are controlled by 17 like mafia like organizations called razones. And these 17 razones coordinate like in collective bodies. So there's no monopoly over the razones. It's sort of an oligopoly over the city by these 17 razones. And each of these razones controls 20, 25 COMBOS below. So what do these groups do? The COMBOS and the razones participate like in different positions in value change of different like illegal and legal markets. So for instance on the drug retailing, the COMBOS is the one who controls the local monopoly and exploits the retail of drugs. And the razones going to be the whole selling the supplier of the wholesale drugs to the street gangs that control the retail market. If you think about, for instance, other kind of businesses, money laundering that's going to be in the part of the razone, theft, robbery and other like kind of smaller petty crimes are going to be controlled by the COMBOS. And also importantly, some of these businesses are like run by the COMBOS or the razones affirm while other businesses are run by independent like entrepreneurs who are members of the gangs in a sort of like entrepreneurial activity that's sponsored by the gang, but for which the person that conducts the business has to pay a tax to the gang. So for instance, contract killings in the case of the COMBOS, one person from the COMBOS might be hired to do a contract killing, that person might conduct a contract killing and has to pay a tax to the COMBOS to which they belong. In terms of like organization, this is just like the organization structure of one of the COMBOS that we've been studying. Typically, they have like well-established positions. Typically, every COMBOS would have one person in charge of extortion and like collecting money, another person in charge of drugs. And in the case of this COMBOS in particular, that person would control someone who sells marijuana, someone who sells cocaine, and someone who sells to CB, which is a different kind of drug that also like widespread and sold in Medellin. And in the case of this COMBOS, they also have the business of like loan sharking. So there's going to be one person in charge of lending the money. And in terms of income, what we've seen is that the food soldiers are roughly at the ninth decile in the income of city earners, while the coordinators or the people higher up are in the first days of city earners. So this is a lot of money, especially in the case of the food soldiers. And it's a strike contrast, for instance, compared to what Stephen Levitt and Benkatesh found in the US, in the Chicago gang, where they thought that people was actually learning well below minimum wage. So in this case, that's really not true. Thinking about the market structure of these groups or kind of a theory of the criminal firm that we've been working on. So we have the razones and the COMBOS. And typically, there are like three different ways of COMBOS-Razón relationships. The first one is a sort of relational contract between the COMBOS and the razones, where these are kind of independent firms. The COMBOS coordinator or the COMBOS leader will be kind of the residual claimant of the profits of the COMBOS. The coordinator or the leader of the COMBOS is going to be from the local neighborhood chosen by the COMBOS itself. And they have a relationship like a sort of this relational contract kind of relationship with the razón. There's another type, which is kind of a vertically integrated firm, where all the COMBOS belong to the same razón as just the same structure. There are only two main instances that we have observed that kind of situation. And one very outstanding razón that's known as Los Triana is a good example, where, for instance, the coordinators of the COMBOS are rotated by the razón. They don't come from the same neighborhood. It's a kind of different, more sophisticated firm that actually was able to integrate all these groups. And there are just a few handful of independent COMBOS, but they tend to be just conquered and controlled by some razón. So what drives these different forms of organization? We believe that there are several forces pushing towards vertical and horizontal integration. One of those is to reduce competition. It's better not to have competition in order to, for instance, extract higher monopolistic rents. Another thing is that integration can facilitate collusion and reduce inefficient conflict and coordinate between different branches of the same organization. And also, there's this idiosyncratic factor of people wanting to be the leader and the controller of this sort of organization. So these are forces pushing towards vertical and horizontal integration. But on the other hand, there are also different forces that push against this form of organization. This is why we believe we find all these very small firms just coordinating between them but not having high levels of vertical or horizontal integration. The first one is that integration makes these organizations more legible to the state. So the risk of expropriation is there. The second one is that there are information and agency problems you can think of, for instance, developing a retail drug market in a small neighborhood. You're required trust, confidence. So typically, you want people from the same neighborhood doing that. And the third one is that in order to have these very sophisticated firms, you need human and managerial capital, which might not always be available there. So these are the forces that we believe are a kind of giving shape to the nature of the market structure of these gangs in Medellin. In terms of collusion, so they collude in several dimensions. I'm just going to mention a couple. One is drug prices. So the razones manage what we believe is a sort of citywide cartel. Because for most of the retail markets, you need to develop trust. So the street gang who controls the retail market develops this relationship with consumers and dealers. So there's a risk of competition. There's a risk of competition between all these 400 combos within the city. But this competition would drive down prices and would drive down the monopolistic rents that would be available otherwise for razones and for combos as well. So what we believe is that, or what we observe is that these razones use kind of their coercive and coordinated capacity to actually set prices and quality and regulate the market in a way that they can extract monopolistic rents. And this is just one example of that. This is Barra Ntoké. It's the largest drug retail market in the city. Pretty much in every corner, there's one different Plaza de Vicio that it's just a drug selling spot. And we found this in sense through qualitative work where, typically, marijuana was sold by a $1 a packet. Then there was a positive supply shock where a lot of drugs arrived to the city. One of the Plaza de Vicio decreased the price by a third. Then the other combos complained to the razón and said, OK, why are these guys competing with me? The razón organize the meeting. They all agreed that this positive supply shock should actually drive prices down for everyone. So they actually settled on that everyone would set the price at, like, 2 thirds of a dollar. So the razones played this role of coordinating prices in an efficient way so that everyone can extract as much trends as they can. Another form of collusion in terms of conflict. So with 400 combos and 17 razones on top, there are all the ingredients for violence. There might be agency problems. I don't know if you have read Chris Blatman book, but this comes from that. Agency problems, like violent preferences, irrational behavior, like many reasons why one gang would fight with one another, community problems, and so on. And what we see is that these razones actually appear to be solving these bargaining problems. So they provide a bargaining forum. They resolve community problems by, for instance, enforcing borders, enforcing contracts, and so on. And they compel leaders and discipline their own members to actually drive violence down. So they played kind of a UN peacekeeper kind of role to control these 400 street gangs and avoid costal conflict. And we've seen this through time. So Medellino had this crazy level of violence in the 90s. How many said rate of almost 400 per 100,000 residents? Now it's roughly 16, also below Chicago, and almost as close as Sao Paulo, as Ben was presenting before. And what we believe is that these groups have played an important role in doing this. And we have instances, for instance, in 2019, violence was spiking in the city. And the state actually leveraged on the capacity of the razones to coordinate to drive down violence again. So if you see the graph, a month for April, violence was spiking in Medellino. And then most of the leaders of the razones who were imprisoned were transferred, all from one prison to another one. They all coincidentally spent one week in the same prison. And then everyone sent a WhatsApp message to the city and violence went down. So this is the razones playing this role as peacekeepers and the state leveraging on that to lower their violence. I'm just going to just a couple of more things to share and I'll finish, governing civilians. So we also observe, this comes from a survey that we ran in 2019, asking people, okay, who do you go to if someone is making noise, if you observe a theft, and so on and so forth. And we ask people, who would they go to? Some of them would say, I go to the state. Some of them would say, I go to the combo or the gang. And this is just combos and the state playing a role of providing governance services in every neighborhood in the city. So to some degree, most neighborhoods have actually like what we think is a sort of duopoly of these protection services. So in one neighborhood, you have a local combo who provides governance services and you have the state providing also his governance services. And we see a lot of variation across the city. So in this map, all these neighborhoods who are red or reddish are mostly controlled by the combo and those that are blue are mostly controlled by the state. So this is kind of like an election made by the combo. We try to look at what can drive that. So we actually, in one of our papers, we try to examine which are the effects of like long run proximity of security and dispute resolution services on gang governance. And what we see is that as the state gets closer to the people, then unsurprisingly, like people report that they reach out to the state more. But more puzzling, we also see that people reports that they go to the gang more as well. So this is kind of these ties with Ben's argument that a strong state might actually induce more gang governance. And why is that? We try to examine this like a bit further and we find that this sort of strategic response by gangs comes mainly in places where there's like a drug market to protect. So they govern more places to avoid the presence of the state so they can enjoy more rents from the drug trade, the local trade in the retail market. And just to finish, implications for policy. So you can think of like a continuum of policy alternatives for a policymaker, right? From complete crackdown on criminal groups which might like increase violence in the short term but like improve long term state legitimacy to a sort of quit pro quo negotiation with gangs so that we use decreased violence in the short term but then you damage long term state legitimacy. And the problem is that it's unclear which of these two extremes leads to higher long term welfare, right? So the probably the solution is somewhere in the middle but the problem is where, right? And this is probably like very context specific and it's most likely not enough information to actually make a point out of this. And a final point, implications for research on organized crime, what we believe is that like we need more research of this kind in not only in Medellin but also in Italy, in Brazil and many other places, in Sao Paulo and others. We need to understand this system before designing and like implementing interventions. We need to collect a lot of qualitative and quantitative data to understand this better because in most of the cases, we only observe homicides and this sort of like other data that's like hard data that's better measured but homicides for instance, just part of the story. We don't know whether gangs are growing stronger or not if we look at homicides only. So, and for this sort of effort, what we believe is that we need to set up some sort of system where groups of researchers focus on one context, go to as much depth as possible to figure out like solutions and context in a better way. So thank you very much. This will continue at some point. Thank you.