The clandestine welfare: The role of illicit actors in the provision of social protection in Latin America

Abstract

There has been an increasing interest in exploring the different types of welfare regimes in middle- and low-income countries. However, most of the studies so far seem to neglect the importance of illicit groups as welfare providers. Illicit groups can be so powerful in many of these societies, that they can create extensive social safety nets embedded in parallel governance orders. Considering their importance as fundamental actors in the Global South, it is required to acknowledge their role as welfare deliverers as a missing piece in the literature. Hence I discuss the nature of what I call “clandestine welfare” and three specific forms of social protection provided by illicit groups: direct, involuntary, and forced. In the first form, the illicit groups provide directly to society by delivering goods or services that the formal state fails to provide. In the second, the illicit group’s activities have involuntary but positive spill-overs over society in terms of welfare. In the last one, the illicit groups use violence to force other social actors to provide social protection. By bringing illustrative examples from Latin America, I aim to show that the action of illicit groups represents a tangible source of welfare for a large segment of the population that goes beyond charity.

Introduction

It is not surprising that during the Covid-19 emergency in Mexico, media reported that various criminal organisations delivered essential needs and medical supplies in impoverished communities. Every time a natural disaster (e.g., hurricanes, earthquakes, floods) or a health crisis like the Covid-19 pandemic occur, criminal organisations take the lead in supporting those communities where the government or the market is unable to reach. The above is not exclusive to Mexico; it is a phenomenon widely replicated in Latin America and other regions of the Global South. For example, during the curfew imposed due to the pandemic in some cities of Colombia and Brazil, local gangs, supported by drug cartels, went door to door distributing food parcels and medicine and demanded that citizens follow basic sanitary measures (Berg and Varsori, 2020; Tamayo, 2020). In South Africa and Kenya, local gangs became the source of financial stability and safety protection for many people without access to food and other essential goods (Stanyard, 2020). In this vein, the pandemic only reinforced what has been a common practice by illicit groups in decades.

This phenomenon is not new; however, regarding these activities simply as “criminal charity” might be insufficient to explain the social complexity behind them. Many of the activities undertaken by illicit groups (broadly defined as non-state violent actors) ¹ are not simply reactive responses to emergencies and natural disasters. They represent a permanent safety net for many people without access to social protection and other welfare services, either public or private. In a way, illicit groups’ alternative forms of governance allow them to provide “clandestine welfare”, which helps them to provide extensive protection to the population in the areas under their control. It might be paradoxical that those illicit groups that undermine the rule of law could also provide services such as health, education, employment, basic infrastructure, and other services. Yet, media reports and other anecdotal evidence suggest that in certain places illicit groups are the main “institutions” through which people can access welfare. Criminal organisations have become so powerful and their action so noticeable in terms of social protection and benefits that a proper discussion on the clandestine welfare is required.

This article argues that the criminal solidarity exercised by illicit groups goes beyond “Robin Hood” practices. In fact, they represent a parallel form of welfare in many countries with fragile or ineffective state institutions. Illicit groups not only challenge the state’s monopoly of violence, but they can even replace it in the provision of goods and services and other essential tasks. Thus, even though their criminal actions hurt the social tissue, illicit groups enjoy great legitimacy based on their role as providers. Studies of welfare regimes are abundant, but no study seemed to have approached illicit groups as the main base of a yet unaccounted welfare model. I contest the idea that only legal actors can be the source of social protection and redistribution. The aim of this article is to highlight the importance of illicit actors and bring to the fore the importance of this dimension to comparative and international social policy scholarship. Illicit groups are relevant actors within low- and middle-income countries that possess significant power positions. Hence they should not be neglected when examining welfare in the Global South. To be clear, this article does not aim to endorse or legitmise any form of criminal activity or organisation, but the illicit forms of welfare ought not to be ignored.

The article is structured as follows. First, I will present a brief discussion on the literature about welfare regimes in the Global South. Subsequently, I will address the importance of families, communities, and other social actors as welfare providers. Then I explain why illicit groups’ actions can be considered more than just charity and how their actions represent a well-established form of social protection. Following, I conceptualise three forms of clandestine welfare provision bringing into discussion examples from Latin America. Finally, I suggest that illicit groups also provide some sort of clandestine welfare provision in other regions of the Global South.

Welfare provision in the global south

The concept of welfare can be interpreted broadly as those mechanisms involved in the distribution and redistribution of welfare, such as transfers, benefits, services, and other forms of social intervention (Sleeman, 1973; Quadagno, 1987; Esping-Andersen, 1990; Schwartz, 2003; Clasen and Siegel, 2007). It has the function of providing protection irrespective of the market and of reducing the insecurity caused by social contingencies such as unemployment or sickness (Briggs, 2006). However, Skocpol and Amenta (1986) stress that the above is often used as a synonym for social policy, which in a sense is a lower concept because it could involve any activity that influences social life. Therefore, what distinguishes welfare from social policy in general is an extended coverage and (relatively) significant levels of expenditure. In other words, while social policy refers to the measures a government adopts to address social issues in determined policy areas, welfare refers to a broader structure in which the state provides a wide range of social services, financial assistance, and support to ensure that the citizens have access to essential resources and protection against various risks. However, this conception of welfare only makes sense regarding high-income economies, excluding countries with lower levels of development (Aidukaite, 2009; Mares and Carnes, 2009). Hence, it is necessary to address the particularities of the welfare regimes in countries of the Global South.

Some authors have pointed out the rise of emerging welfare regimes in middle-income countries that are mobilising their resources to provide minimum standards of income and services (Huber and Stephens, 2012; Niedzwiecki, 2015). Even if these efforts are still far behind those of advanced economies, they represent a substantial expansion in terms of public spending and the implementation of generous social programmes and interventions (Barrientos and Hulme, 2009; Dorlach, 2020). Similarly, low-income countries have also experienced important progress in adopting social protection and assistance policies that cannot be ignored (Lavers and Hickey, 2016). Even if it’s not entirely accurate to talk about proper welfare regimes in many low-income countries because the expansion of social protection is still limited, literature suggests that there is a strong orientation pushed by local and international actors to develop further schemes of protection (Deacon, 2007; Barrientos and Hulme, 2009; McCord, 2012; Barba, 2019). In addition, there have been some interesting developments in terms of welfare in authoritarian regimes, where ruling elites have been incentivised to provide extensive welfare to remain in power (Eibl, 2020).

Mares and Carnes (2009) suggest that social protection in countries from the Global South varies in character from that of the developed countries due to a variety of factors, particularly political factors. Hence the development of welfare in these contexts might not be similar to the path-dependency processes that explain its expansion in developed countries. While the foundations of the European welfare states required a political democratic settlement between parties and unions (Iversen and Stephens, 2008), the emerging welfare in low- and middle-income countries faces completely different political and socio-economic conditions that undermine the potential of achieving a political settlement (Deacon and Cohen, 2011). As suggested by some authors, democracy is not a prerequisite for the development of welfare in many of these countries (Aidukaite, 2009; Eibl, 2020). Likewise, causal factors that explain the expansion of welfare in developed economies are not the same in the Global South. For example, industrialisation and economic development would not make sense as explanatory variables of the expansion of welfare in the Global South since many of these countries have low levels of development (Hickey et al., 2021). Equally, the role of trade unions in many of these countries, with some exemptions, of course, might be negligible and their political power questionable or irrelevant (Niedzwiecki, 2015; Dorlach, 2020).

Furthermore, conceptualising and measuring welfare in the Global South is particularly challenging because in many countries, data availability might be scarce and its reliability questionable, thus making the “dependent variable problem” ² even worse (Dorlach, 2020). Likewise, cross-comparative examinations might also be limited because social policies that work in some countries might actually aggravate the distribution of welfare in others (De Ferranti et al., 2004). However, there have been some interesting attempts to categorise welfare in the Global South. For example, Wood and Gough (2006) have proposed a typology in which countries are clustered into three categories: welfare state regimes, informal security regimes, and insecurity regimes. In the first category are located those countries in which citizens can expect a reasonable level of protection (although this can vary from country to country) granted by the state and via participation in the labour market or private alternatives. In the informal security regimes, the role of the state as provider is limited due to the small tax base and informal nature of the labour market; hence people rely heavily on family and community relationships to meet their security needs. Finally, those countries with insecurity regimes are characterised by a set of adverse conditions that generate vast insecurity and inhibit the emergence of mechanisms to mitigate social needs. It must be said that this is probably one of the most influential typologies created to explain welfare beyond the Global North with wide acceptance until today.

Furthermore, influenced by Esping-Andersen’s (1990) work, some scholars have developed their own regional typologies to define welfare in the Global South. For instance, Seekings (2005) distinguishes three types of welfare regimes in developing countries: agrarian, inegalitarian corporatists, and redistributive. The agrarian regimes are characterised by the private provision of welfare that depends on access to land or kin. In inegalitarian corporatist regimes, formal employment allows gaining access to welfare. In the last one, citizens access security through non-contributory schemes. In a similar line, Rudra (2007) points out that welfare in less developed countries is driven either by the market, or by protective mechanisms (normally associated to formal work), or by both at the same time. Equally, Martínez-Franzoni (2008) proposed a typology based on the level of commodification of labour, decommodification, and defamilialisation. The author identified three types of welfare regimes: protectionists, productivists, and non-state familialists. The first category refers to those countries in which welfare is obtained primarily through private services in the market. In the second, welfare is associated with the contributions made through formal employment. In the last one, family and community relationships are the cornerstone of welfare provision.

There are many other interesting attempts to classify, explain, and compare welfare in various regions of the Global South (see, for example, Pribble, 2011; Cruz-Martinez, 2014; Kim, 2015; Mkandawire, 2020; Martínez-Franzoni and Sánchez-Ancochea, 2021); however, as suggested by Mahon (2018), most of these conceptualisations acknowledge that social protection is mostly provided in the form of a diamond model in which state, market, family, and communities participate all together although at different levels of intensity. Furthermore, Roumpakis (2020) stresses how emerging literature is expanding even further the diamond by considering the importance of many forms of informal and non-statutory welfare protection provided by actors such as transnational families, international organisations, and voluntary and non-governmental organisations. Thus, scholars should consider opening the discussion to reclassify many of the categorisations previously constructed about welfare in Global South countries. In a similar vein, Wood (2015) sees necessary to rethink schemes beyond the classical welfare typologies since many actors beyond the state and the market produce multiple forms of social protection.

Beyond the state and the market

As noted by many scholars, families and communities have played an essential role in the delivery of welfare in contexts of low state protection and social insurance fragmentation. For example, Ferrera (1996) and Gal (2010) point out that Southern European welfare regimes rely not only significantly on the informal sector but also on the security granted by families and community actors such as voluntary organisations and religious entities. Equally, Bambra (2007) notes that in East Asia due to the reduced role of the state and the strong Confucian ethics, the family and the voluntary sector are essential elements in their social safety net. Relatedly, Papadopoulos and Roumpakis (2017) assert that governments and employers shift risk and obligations onto families, thus becoming a core element in the welfare architecture of East and Southeast Asian countries. Regarding the Global South, many studies have stressed the importance of non-state actors as providers of basic goods and services (Stubbs, 2003; Gough et al., 2004; Kajimbwa, 2006; Martínez-Franzoni, 2008; Cammett and MacLean, 2011; Wood, 2015). In contexts of delayed or poor industrialisation and the predominance of informal labour markets, families and communities are key elements in the dynamics of social welfare.

Many authors suggest that the rise of these non-state actors as welfare providers in low- and middle-income countries is because of the decline or absence of the state to lessen market failures (Bratton, 1989; Stiglitz, 1991; Moreno, 2001; Cammett and MacLean, 2011). Even though some of these countries have undergone a significant expansion of their social policies that in many cases have formed emerging welfare states, the above has not reduced the relevance of the non-state actors as welfare providers (Velazquez, 2020). This has produced various political consequences. First, the creation of a “franchise state” in which non-state actors are used as subcontractors to provide for citizens’ needs, which in a way reduces the responsibility of the state to address structural issues (Wood, 1997). Although some scholars suggest that the participation of non-state actors in the provision of welfare could be considered a form of co-governance (Fenwick et al., 2012; Chaney and Wincott, 2014), the lack of regulation of many of these actors, particularly in the Global South, can hinder the administrative and fiscal capacities of the state (Cammett and MacLean, 2011).

Another consequence is the creation of clientele relationships between non-state actors and the citizens. As stated by various authors, there is a potential risk that these actors drag welfare recipients into political structures to fulfill their own particular agendas (Kajimbwa, 2006; Boege et al., 2009; Smits and Wright, 2012). The above can promote transformational change, but at the same time, it can promote sectarian practices and exclusivist identities (Occhipinti, 2015). Furthermore, non-state actors may create hierarchies of welfare recipients that can perpetuate or worsen social inequalities (Hyden, 2006). For example, some religious organisations may refuse to support access to reproductive health services, which can especially hurt women in certain contexts (Clarke, 2009). In addition, as stated by Cammett and MacLean (2011), non-state social provision has a negative effect on citizenship. The social bonds that bind citizens to their national political units erode when private parties, rather than the state, provide the welfare. Finally, as noted by Wood (2015), not all the families and social actors have the same composition, and their unique dynamics can also be quite complex. Thus, assuming that the mentioned actors can be categorised the same on every context would be wrong. What is more, their participation many times contributes to produce a wider fragmentation of the social provision. Consequently, the stratification of social protection due to the interplay of various welfare architectures might end up creating new tensions within households and communities (Mahon, 2018).

As demonstrated, abundant light has been shed on the importance of the role of families, communities, and other social actors in the delivery of social protection. Despite this significant advance, most of the literature has overlooked the role of the actors out of the law as welfare providers regardless of their noticeable presence in many countries. It is understandable that conceiving illicit actors as legit welfare providers might sound contradictory, but they should not be discarded either, considering their strong presence and the extended protection they can offer for many people who are socially excluded. This is why, in the following section I argue why illicit groups should be considered as valid welfare providers.

Why illicit groups matter?

First of all, I use the term “illicit groups” to refer to a broad range of well-established organisations with criminal activities that can include various types of organised crime such as gangs and drug cartels; likewise guerrilla (rebel), fundamentalist, and terrorist groups form part of such organisations. Indeed, these groups are not homogenous, and their motives can range from business and profit to ethnic vindication and political ideology. For example, while the Zapatista Army of National Liberation (EZLN in Spanish) is an anti-neoliberal, anti-globalist Marxist group with a strong indigenous identity in southern Mexico (Padilla, 2018), the Mara Salvatrucha (or MS-13) is an international street gang with presence in North and Central America with organised crime characteristics but deeply rooted in urban marginality (Wolf, 2012). Likewise, the New Generation Cartel of Jalisco (CJNG in Spanish) or the Sinaloa Cartel in Mexico, both profit-oriented organisations specialised in drug trafficking with highly developed economic structures for money laundering to fund their activities (Nájar, 2015), are different from Hamas in Palestine that is a fundamentalist and terrorist group that became the de facto governing authority of the Gaza Strip and aims at establishing an Islamic state in the Palestine territory (Nusse, 1999). It is clear that the mentioned actors differ in their aims and motives; however, the reason why I include these and other actors in the same broad definition of illicit groups is that all of them are social institutions that operate in the realm of illegality and challenge the state’s monopoly of violence. Equally, these groups despite their differences share some common characteristics such as their illegal nature, the creation of complex bureaucratic structures with clientele networks, and the capacity to create an alternative governance that operates in various contexts (Albini, 1995; Sanchez-Jankowski, 2003; Wright, 2005; Abadinsky, 2007; Lyman and Potter, 2010; von Lampe, 2016).

Second, as controversial as it can be, my argument in favour of including illicit groups as welfare providers is supported by the fact that these groups in their own particular manner can become a source of social protection in specific contexts notwithstanding they might be the reason why formal mechanisms of social protection are limited in the first place. Indeed, the nature of most illicit groups is predatory, with the ultimate goal of gaining or maintaining power over certain territory that often involves displacing the authority of the state (Tang, 2023). Consequently, many of their actions directly hinder the bureaucratic and administrative capacity of the state that allows it to function, including those aiming to provide welfare. Thus, illicit groups can restrain formal social protection mechanisms that thwart the development or growth of a formal welfare regime. Likewise, illicit groups might deter or negatively influence other social and community actors (e.g., NGO, religious groups, and community-based groups) that normally would participate as informal welfare providers (Travaglino and Abrams, 2019). As suggested by Zhang (2021), violence is a primary tool used by illicit groups to organise societies under their control; thus, psychological and physical harm is present to promote discipline and loyalty among its members and other actors, which undoubtedly generates a toxic environment that threatens the most basic rules of civil coexistence. Then, it sounds contradictory arguing that illicit groups can be considered within the spectrum of social institutions that participate in the delivery of welfare. Nevertheless, there are specific reasons for doing this.

As suggested by Madsen (2009), illicit groups can be considered proper institutions as such since they mirror structural characteristics of the licit economy and the dynamics of other legit actors. Despite their unlawful nature and invisible constitution, these groups play a tangible role in meeting specific demands that many times are not observed from a top-down view. It could be argued that their purpose differs greatly from the state, yet the deep motivation that drives those criminal group’s actions should not be considered as a criterion to determine if these count as social protection or not. The motivation behind the state or illicit groups providing welfare might be different, but, in the end, both act according to their own cost–benefit analysis, be that state survival, partisan and political support, or territorial control, not just benevolence. ³ For example, from a historical perspective, Germany’s initial welfare state arguably had little to do with solidarity but was a calculated effort of the Chancellor Otto von Bismarck to preserve the unity of the country towards the end of the nineteenth century (Steinberg, 2011). Likewise, as pointed out by Hilson (2020), the development of Nordic welfare regimes in the early twentieth century was partially due to the fear of a potential revolution caused by social discontent. Assuming that welfare is granted purely for solidarity reasons would be inaccurate even for European models. Thus, it is important to acknowledge the specific political and territorial dynamics that shape welfare in many low- and middle-income countries, even if these occur in the realm of illegality.

In accordance with Abello-Colak and Guarneros-Meza (2014), North-centric approaches to governance regarding service delivery and provision overlook the informal arrangements “where legal and illegal boundaries blur” (p. 3272). This is due to a normative stance in which out-of-law actors are set aside since they are considered illegitimate, and the territorial sovereignty of the state is unquestionable. However, this normative view is rendered inconsequential because the participation of illicit groups in the service and welfare governance can be easily observable. As suggested by a vast amount of literature (Tilly, 1985; Skaperdas, 2001; Arias, 2006; Velásquez, 2009; Clunan and Trinkunas, 2010; Abello-Colak and Guarneros-Meza, 2014; Arjona, 2016; Travaglino and Abrams, 2019; Trejo and Ley, 2020), parallel orders of governance with well-developed administrative and bureaucratic structures can be created in absence, fragility, or complicity with the state’s institutions that are reinforced by corruption and clientelism. In this sense, Tilly (2005) argues that the underworld and the state often create mutual dependence in a “destruction-integration” dynamic. That is, illicit actors carry out and endure their predatory activities by building trust networks based on solidarity and shared values with other social and community actors that allow them to integrate and later keep territorial order. Empirical cases such as the mafia in Italy, drug cartels in Mexico and Colombia, or gangs in South Africa evidence how illicit groups create forms of parallel governance in which new institutions replace or coexist with the formal state. These parallel orders of governance are utterly destructive because they ultimately rot the institutions that supposedly guarantee social order and civil coexistence, being plagued or replaced by patronage dynamics that obey perverse interests. Yet, these arrangements are deeply embedded in wider sectors of society becoming a symbolic feature that influences people’s social behaviours (Barbagallo, 2010; Enríquez, 2020).

Furthermore, those orders and arrangements can be considered valid despite eroding the authority of the state because the communities in which they are rooted provide them with legitimacy. The strong social support that illicit groups can obtain by conducting integration activities (as explained above) helps them redefine illegality as benevolent. When illicit groups participate as either intermediaries or direct providers of welfare, they not only aim to obtain territorial control but also redefine the social contract (Tilly, 1985; Skaperdas, 2001; Beckert and Dewey, 2018; Trejo and Ley, 2020). Accordingly, illicit groups justify their illegal activities by promoting a new set of values in order to build group cohesion that reinforces their integration with communities (Colleti, 2019). Consequently, in certain contexts where the formal state institutions are considered flawed to provide security and social protection, criminality and its institutions are seen as a valid social arrangement (Williams, 2012). Thus, in many communities where illicit groups are rooted, these are not considered anti-social actors but legit governance actors that deserve respect and admiration (Standing, 2003).

Moreover, the idea that the action of illicit groups is merely “charity” or public relations practices at best must be challenged. This is because the power and territorial control of these groups allow them to perform systematic forms of social protection. As explained above, illicit actors engage in the delivery of services and welfare to gain territorial control and governance legitimacy, but these actions are not sporadic but sustained over time. Therefore, I argue that despite the predatory and illegal nature, the social protection provided by illicit groups – either voluntarily accepted or forcedly imposed on the communities – could be considered a form of “clandestine welfare”. First, because it represents a wide range of systematic and extended practices that cover a significant number of people. Second, because illicit groups develop well-developed bureaucracies and mechanisms to attend people’s needs. Third, it produces tangible welfare by redistributing wealth or granting individuals access to certain social rights that were not accessible before. It differs from other types of informal welfare because it is provided by actors in the shadows that represent a parallel governance with its own norms and institutions.

Also, the clandestine welfare should be differentiated from common charity and philanthropy because the latter terms would refer to disinterested and non-reciprocal actions pushed by moral or religious motives (Osella, 2018). That would not be the case of the clandestine welfare, which would be part of a control mechanism used by illicit actors to sustain their predatory activities in the long run. As explained previously, to be able to build parallel governance, these actors engage in integration activities (i.e., welfare delivery) to create clienteles and obtain social legitimacy. In addition, charity and philanthropy are voluntary and discretionary actions that do not aim to produce social rights; in a way, these represent acts of benevolence that aim to preserve the social status quo (Herman, 1999). In contrast, the clandestine welfare would provide access to certain social rights, for instance, healthcare, education, housing, or employment opportunities, even if those access mechanisms are given by outlaw activities.

Foundations of the clandestine welfare

As discussed by many political scientists, the state has been conferred the obligation of providing some level of welfare (e.g., education, healthcare, assistance support). This obligation is fulfilled through collective social action mechanisms, more precisely formal institutions aimed to provide social protection (Spicker, 2000). The moral conception of the welfare state is based on a narrative of interdependence and solidarity in which the state is the privileged entity for granting protection to the community. Certainly, the term welfare state can have multiple interpretations, but there is an underlying assumption that some values and rights are fundamental and must be provided collectively to the people (Rhodes and Meny, 1998; Baldwin, 1990). In this sense, welfare states are in essence a social contract that guarantees collective rights as a form of legitimisation (Robson, 1976; Habermas, 1986). The expected outcome of the contract accordingly would be a virtuous society based on a common good (Shionoya, 2005).

Based on the above, it could be said that the clandestine welfare finds a moral foundation in the unfulfillment of the pre-established contract that supposedly guarantees a set of rights to the people. If the state fails to deliver social protection to a wider sector of society, then the narrative based on community, solidarity, and interdependence becomes empty and loses its social binding effect. Consequently, people seek other types of social arrangements to access welfare even if those are based on illegality. As suggested by Powers (1978), the moral obligation to obey the social contract can vary significantly according to the individuals’ utilitarian and structural perspective. Thus, long-term non-compliance may define new social institutions and practices out of law.

Evidently, the clandestine welfare is an infringement of the social rules and law, yet the moral outrage – the sense of injustice – due to the failure to provide a certain level of social protection justifies it. As claimed by Moore (2015), when social needs are not met, preexisting rules are questioned and the authority is challenged. In this case, the state may preserve the legal authority, but it is hurt in its legitimacy, which opens the door to new social arrangements and figures of authority. From a sociological perspective, within a social contract there are normative assumptions and expectations regarding social relations. However, they can change according to societies’ shared beliefs and understandings (Rubin, 2012). In this vein, the relationship between society and actors of the criminal underworld acquires a new significance when individuals collectively acknowledge illicit actors as welfare providers. Thus, a new social contract is defined.

The implication of redefining the social contract is major because it legitimises violent actors within the sociopolitical structures (Herrera, 2023). Therefore, the sovereignty of the states is compromised, and the states compete with alternative forms of governance or develop hybrid forms in which the distinction between the state and the underworld is faded. Thus, key aspects such as the monopoly of violence and the control of the territory are no longer an exclusive prerogative of the state (Herrera, 2023). However, due to the fact that the redefined social contract is not based on the same values of solidarity and interdependence as traditional welfare states but in outrage and the weakness of the rule of law, violence becomes the norm to guarantee the social order.

Considering that each community will redefine the terms of the social contract according to their own views on illegality and the role of illicit actors as welfare providers, the eligibility criteria to access clandestine welfare will vary from case to case. In traditional welfare states, citizenship is often the criterion to access social rights. This is because as members of political communities, holding the same rights helps to develop a stronger political identity (Marshall and Bottomore, 1992). In the clandestine welfare, the eligibility criteria to access benefits are more complex because they are set by each illicit group according to their own interests and capabilities. Also, rather than seeking a common political identity, criminal organisations aim territorial and social control; therefore, the delivery of welfare can be more subjective.

From an ethical perspective, the clandestine welfare is not desirable; however, its existence can be seen as a direct consequence of the social imbalance produced in many current societies. As I will demonstrate in the following section using cases from Latin America, the clandestine welfare can occur in different ways, but all of them provide a tangible safety net that protects people from social contingencies despite its negative effects.

Forms of clandestine social provision: The case of Latin America

Studying illicit activities can be extremely difficult and presents several methodological challenges, particularly the scarcity of accurate data (Gavin et al., 2010; Blattman et al., 2022). Considering that illicit groups are social institutions in the shadows, much information about them is based on incomplete data or merely anecdotal evidence. ⁴ Thus, it might not be possible to construct a proper typology of the clandestine welfare based on comparable data. For example, Clasen and Siegel (2007) point out that a common indicator to assess and compare welfare regimes is social spending (even if it is not exempt from criticism). It would be absurd to attempt to understand the clandestine welfare using this variable because there is no way of knowing how much an illicit group allocates for social provision. Yet, it is possible to understand the nature of some criminal activities through indirect observation (Gavin et al., 2010). In this sense, media reports and previous investigations can provide extremely useful insights that clarify the activity of illicit groups in terms of welfare in Latin America.

After an exhaustive revision of media and literature on the topic, ⁵ it was possible to identify three specific forms of welfare delivery: direct welfare provision, involuntary welfare provision, and forced interventions. First, direct provision means that illicit groups provide social welfare through their own means, either by delivering support in the form of cash or in-kind benefits, providing a public service that the state fails to provide, or funding third actors that provide welfare support to society. The above allows recognising a wide range of activities as direct provision. As mentioned previously, considering how systematic and extended these interventions are, they should be considered part of a welfare state and not only charity practices, even if in the long run they pose a threat to the formal state.

For example, it is widely known that the criminal organisation led by Pablo Escobar in Colombia became the main benefactor of Medellin, constructing a hospital, leisure, and sports facilities for the community and hundreds of homes for the poor (Clawson and Lee, 1998). In a similar case, reports suggest that Joaquín “El Chapo” Guzmán, as the most visible figure of the Sinaloa Cartel in Mexico, developed important infrastructure projects such as the construction of roads, churches, schools, and even the installation of a power plant to support impoverished communities under his control (El Universal, 2019). I want to be emphatic regarding these activities being more than charity. Indeed, Pablo Escobar and Joaquín Guzmán could easily be considered as “social bandits”, as coined by Hobsbawm (1971), due to their charisma and social representations as rebels of oppressive regimes. However, the level of engagement in the development of those communities and the extension of protection provided by their criminal organisations go way beyond “Robin Hood” practices. The actions mentioned above do not represent sporadic philanthropic actions that could be considered disinterested or motivated by morals, but a consistent level of social protection that ensures illicit groups to have control over these areas. Another representative example of direct provision, but of a different nature, would be the extended welfare provided by EZLN, an indigenous guerrilla group that controls vast territories in southern Mexico. This group created an extremely well-developed parallel state that provides an extensive range of public services to almost 300,000 people, including free education, access to healthcare, public security, and employment opportunities (González, 2003; Mallett-Outtrim, 2016). It could be argued that nowadays the EZLN is widely accepted as a communitarian actor with visible political activity, thus is no longer a clandestine actor. However, they kept their paramilitary operations until very recently, a peace deal with the government has not been reached, and the autonomy of the territories under its control has not been recognised from a legal viewpoint ⁶ (Villegas, 2017).

Furthermore, direct welfare provision can be split into two categories: exclusive and open. Exclusive provision means that welfare is restricted to the members of the criminal organisations, while an open provision means that the general public can enjoy it. It is important to make this distinction because illicit groups can operate in both ways according to their needs. The examples of the Medellin and Sinaloa Cartels supporting and improving the quality of life of impoverished communities would be clear cases of open provision, since all the citizens would enjoy the benefits even if they are not necessarily supporters of those criminal organisations. In contrast, an example of exclusive provision would be the construction of health clinics and hospitals in the favelas of Rio de Janeiro in Brazil that are restricted for members of criminal organisations who cannot visit regular hospitals due to the risk of being arrested (Guardian, 2009). In this specific case, the membership to a specific criminal group is what grants access to healthcare; the welfare arrangement is reserved for only those individuals with direct participation in the outlaw activities.

Sometimes illicit groups can operate open and closed at the same time. That would be the case of the Revolutionary Armed Forces of Colombia (FARC), a guerrilla group (considered by many countries as a terrorist organisation) that fought against the Colombian state for over 50 years. According to Brittain and Petras (2010), FARC created in their areas of influence mechanisms for collective work and assistance that sought to preserve the well-being of peasant communities. The welfare at this level would be open to all the members of the community. However, those who became members of the guerrilla group had special access to reserved benefits, including health assistance, education, and other basic provisions (Serrano and Rodríguez, 2017). It might be debatable whether the social protection provided by FARC to both the communities and its own guerrilla members truly improved their well-being. Nevertheless, the questionable quality of social protection does not change the fact that some level of welfare was granted in the absence of formal mechanisms of social protection.

It is also worth mentioning that illicit groups can also provide direct assistance by participating in a variety of mixed schemes. For example, during the pandemic, the local government in Medellin forged alliances with gangs controlled by criminal organisations to coordinate and distribute the allocation of food parcels and medical supplies in poor neighbourhoods (Tamayo, 2020). The government considered that local gangs had not only more legitimacy but also better operational and logistical capacity, so instead of rivalling them in the delivery of supplies, the government decided to cooperate with these criminal groups. Similarly, as claimed by Pérez-Rayón (2006), there is enough evidence that suggests that in some areas of Mexico, drug-trafficking groups and the catholic church are deeply intertwined. Consequently, many of the social actions carried out by the church aimed to improve the quality of life of the poor and vulnerable are funded directly by criminal groups. Even in those cases where illicit groups are not fully responsible for the delivery of welfare, I would still consider them as direct provision because the social arrangements created between the involved parties generate specific institutions ⁷ designed to provide some consistent level of social protection.

As can be observed, direct provision can be as extended as the needs and resources of the illicit groups allow them. It is true that the concept of welfare from a broad perspective also involves other elements beyond social assistance, such as tax or industrial policies; however, the delivery of social provision to individuals (who otherwise would not obtain such welfare through the market) is its central characteristic (Sleeman, 1973). In this sense, the action of illicit groups allows socially excluded individuals to access diverse forms of social protection and other welfare benefits. Thus, the clandestine welfare can be recognised based on this direct provision. It could be argued that these interventions represent a form of social control that constrains the freedom of individuals embedded in those contexts. However, this would not invalidate the fact that for many individuals the above represents a tangible source of social stability and mobility (O’Kane, 1992; Odumosu, 1999; Bergman, 2018).

The second form of welfare provision identified is involuntary provision; in other words, the activity of illicit groups due to indirect but fortuitous circumstances permits individuals to access formal and informal welfare benefits. In this case, the illicit groups do not produce the social welfare deliberately, but it is a “fortunate” outcome for the recipients. Trejo and Ley (2020) claim that often the borders between the formal state and the underworld are blurred, and instead of having crime and state as separate spheres, these can couple into a common space that endorses criminal behaviour using the formal mechanisms of the state. Certainly, a “captured state” generates a toxic dynamic that diminishes its legitimacy and hurts society, but there is also a chance that the permitted criminal activity could have some positive spill-overs. For example, criminal organisations may become so profitable that they become employers for a large number of people with salaries higher than the formal market, which in a way could be considered a form of wealth redistribution (Ríos, 2009; OEA, 2013; Gómez, 2018). Just in Mexico, according to Prieto-Curiel et al. (2023), cartels represent the fifth largest employer in the country with around 185,000 people enrolled in their organisations. Equally, Herrera (2023) points out that the salaries for the lowest ranks in those organisations can be significantly higher – up to 25 per cent – than the national average wage.

Similarly, many activities from illicit groups require the creation of formal businesses for operational or logistical reasons. Despite being interlinked with criminal activities, these companies not only employ people (who often do not know the true nature of the business) but also grant them access to the state’s social security. In Mexico, there are reports that the Sinaloa Cartel founded and operated almost a hundred companies that were registered with the Mexican Social Security Institute (Guazo, 2016). What is more, many of these companies received subsidies from the government to operate social services for the most vulnerable. The Sinaloa Cartel operates dozens of agricultural companies that receive welfare benefits to support peasants, which later are utilised to produce and harvest illegal crops. Because of this, many peasants receive a legal employment contract that not only grants them social security but also gives them more advantageous working conditions that include the provision of basic goods and services (Nájar, 2009; Guazo, 2016; El Universal, 2020).

Another example of involuntary welfare provision would be the creation of low-cost health clinics and drugstores that are part of a money-laundering scheme for criminal organisations. In the 1970s, the Cali Cartel in Colombia founded the drugstore “Drogas La Rebaja” which became so popular and prolific “that would eventually handle about half of the pharmaceutical market in Colombia” (Rubio, 2013: 84). Beyond its money-laundering purposes, the drugstore sold medicines that were up to 30 per cent cheaper than its competitors, which directly benefitted the poor that had limited health alternatives. In a similar vein, media suggests that the Sinaloa Cartel founded in recent years a franchise of low-cost health clinics named “Salud Digna”. This business operates with unlawful intentions, yet it has become utterly popular among the low and middle classes due to its affordable health services (Noroeste, 2015; Ramírez, 2018; Fragoso, 2020). Despite these types of clinics being a private “business”, they can be considered an alternative health system for a large segment of the population without access to social security (Montoya et al., 2018). So, in a way the above can be seen as criminal organisations subsiding healthcare through a market alternative. This might sound provocative; however, welfare can also rely on market mechanisms to deliver healthcare (Mera, 2002; Busemeyer and Iversen, 2020). Hence, it could be said that the clandestine welfare may also provide this type of social protection through the market, even if this is not the primary purpose and the nature of the activity is unlawful.

Finally, the third form of welfare provision would be forced interventions. In this particular case, the illicit groups intervene in the social provision of welfare by forcing social actors to attend people’s needs (delivering either goods or services) through violent and coercive methods. Kalyvas (2006) argues that illicit actors are rational players who aim for the monopoly of power in determined areas. Thus, these actors develop various strategies to obtain legitimacy among the population in those areas. In this vein, the provision of essential goods and services promotes a direct control over the population in the territories under their influence. However, illicit actors are not always able to provide directly due to limited resources or lack of technical capabilities. Consequently, they might force other social actors through violent methods to provide the required goods and services in those territories. For example, in the favelas of Rio de Janeiro in Brazil, criminal organisations established de facto price controls on essential goods and medical supplies during the pandemic to support poor communities by threatening shops and markets located in their territories to not increase prices (Berg and Varsori, 2020). Equally, to fight back against the current inflation in Mexico, criminal organisations have threatened vendors that raise the price of corn tortillas, which is the cornerstone of most Mexicans’ diet (Villagómez, 2022). As suggested by Guénette (2020), price control is a social policy tool that distorts the market with the aim to protect vulnerable consumers and reduce households’ uncertainty. Thus, using violent methods, illicit groups intervene directly in the market, pushing prices down or keeping them at a low level to ensure population access to corn tortillas.

Another example of forced interventions is the kidnapping of medical practitioners. In Mexico and Brazil, there are plenty of documented cases where doctors and nurses who operate in areas with a strong presence of organised crime are abducted to provide health services to the members of those organisations (Guardian, 2009; Monroy, 2015; Fisher, 2022). In some cases, this forced healthcare is also opened to the rest of the community. For instance, during the outbreak of yellow fever in 2018 in Rio de Janeiro, a powerful drug lord kidnapped nurses to vaccinate the entire local community of the favelas that was ignored in the government health plan (Nash, 2018). In Central America, the Mara Salvatrucha (MS-13) and Barrio 18 gangs ⁸ became key actors to contain the spread of Covid-19 by imposing a curfew under threat of death to preserve the health of the communities under their control (Rivard, 2020).

The above can be very controversial, and it could be argued that these forced interventions can actually inhibit people’s access to public services because eventually shops would close to avoid price controls, or medical practitioners and other social workers might stop visiting those areas under the control of illicit groups. Nevertheless, these interventions happen because illicit groups were able to establish parallel orders of governance in the absence or collusion of state institutions. This erodes the state institutions even more, increasing the power of the mentioned groups, which eventually strengthens their capacity to bend and coerce preexisting social institutions. Consequently, these forced interventions might represent in some cases the only way to access social protection, reinforcing the nature of the clandestine welfare.

It is also worth mentioning that the clandestine welfare could be present despite the existence of a formal welfare state. To be clear, the clandestine welfare is not an extension of the traditional welfare (i.e., state, market, communities) but an alternative or parallel system of welfare embedded in the underworld. Thus, as long as there are individuals excluded from formal mechanisms of social protection and the rule of law fails to reach the underworld, there is a chance that a clandestine welfare develops. I want to be explicit that not all illicit groups are benevolent or will offer welfare alternatives; in fact, their predatory activities represent a threat to society that hinders the development of formal welfare regimes. Also, individuals involved in clandestine welfare usually must participate directly or indirectly in outlaw activities with the obvious risk this represents. For example, it is well known that most of the people living under the territories controlled by the Sinaloa Cartel in Mexico, or the Mara Salvatrucha gang in El Salvador, are involved either voluntarily or coerced at various levels with the activities conducted by these criminal organisations (Paullier, 2015; Zoethout, 2016). Equally problematic is the fact that violence is what norms social relations among these individuals. For instance, the FARC in Colombia established punitive forms of “justice” to solve disagreements and other tensions among its members and the communities. However, these many times ended up being “witch-hunts” that promoted arbitrary punishments on individuals considered betrayers (Gonzalo, 2017). Notwithstanding the above, the potential of these illicit organisations to participate in the distribution and redistribution of welfare should not be ignored or underestimated.

Finally, to distinguish clandestine welfare from charity or philanthropy, it should be observed how extended and systematic these social interventions are, and what the ultimate purpose of these are. In the mentioned cases, social protection is granted in a broad and continuous manner through specific deliverance mechanisms with the aim of gaining or maintaining territorial or political control over the state. Therefore, I would argue that these criminal organisations are indeed clandestine welfare providers. However, not every actor can be considered as such. For instance, Hell’s Angels, ⁹ an outlaw motorcycle club with presence all over the Americas, is well known for undertaking charity fundraising to support specific causes such as children battling with cancer, or animal welfare (McDonell, 2020; Bryant, 2021). This might contribute to community building, but it does not represent an established mechanism of social protection. For this reason, the clandestine welfare must not be confused with charity or philanthropy.

Beyond Latin America

The examples presented earlier are representative of Latin America’s reality, but that does not mean that the clandestine welfare is exclusive for that region. Delving into the Global South context, it is possible to find plenty of cases where illicit actors are active providers of welfare. For example, Hezbollah in Lebanon is a terrorist organisation with proven bureaucratic capacity to deliver public services. According to Barak (2020), during the Covid-19 pandemic, this organisation had a proactive role in protecting civil society by mobilising 1,500 doctors and 3,000 nurses in needed areas. Similarly, they were able to build temporary medical centres, leasing private hospitals, and even allocate personnel to build medical ventilators. The above fits in the category of open and direct clandestine welfare because Hezbollah’s actions are delivered with its own (financial, logistical, and human) resources and aimed at the whole community. Likewise, they are motivated by the objective of increasing their political and territorial control over the country by gaining legitimacy and increasing their social base (Moubayed, 2020). Hezbollah has built an impressive parallel administrative and bureaucratic structure capable of meeting people’s needs and demands, and it is considered as the de facto governing actor in wider parts of Lebanon (Robinson, 2022). It might be questioned if this organisation is really an outlaw actor or not since they entered mainstream politics in 2009; I would argue yes because they keep a heavily armed militia that not only rivals the central authority of the state but also represents an international threat due to their terrorist activity.

Similarly, radical and fundamentalist groups in Pakistan have used Madrassas (religious schools) to develop a safety net for a large segment of the country’s poor population that provides not only education but also housing, health assistance, and financial aid (Abbas and Syed, 2021; Mumtaz and Whiteford, 2021). It could be argued that despite many Madrassas are not regulated by the government, they do not represent clandestine or parallel forms of governance but informal welfare mechanisms since they are communitarian actors with a genuine interest in providing social support (Mumtaz and Whiteford, 2021). However, as suggested by Singer (2001), some of these can be funded and used by illicit actors (i.e., terrorist groups) as a mechanism to expand their influence and gain militants to continue their criminal activity. In those cases, I would categorise them as part of the clandestine welfare.

Both examples indicate how actors outside the law can deploy some well-developed capabilities to provide social protection to those individuals who fall through formal or informal safety nets. As suggested by Acemoglu and Robinson (2012), state institutions are often much feebler in the Global South, which allows perverse dynamics that favours the presence of actors that challenge or detract the authority of the state. Unsurprisingly, the clandestine welfare seems to be more present in low- and middle-income countries where illicit groups can create extended parallel forms of governance. However, it must be asked if the clandestine welfare can also be present in countries of the Global North. Argumentatively, illicit groups become a source of welfare when this is not accessible – for whatever reason – throughout the state, and informal support from families and communities is not sufficient. Hence, in some contexts of the Global North, it is likely that the clandestine welfare could find some space to develop. There are some indications of the aforementioned. For example, the Italian mafias or the Yakuza syndicates in Japan are powerful criminal organisations that have built complex systems of governance in the underworld (Arlacci, 1986; Skaperdas, 2001; Fallone, 2018; Colleti, 2019; Baradel, 2020; Baradel and Bortolussi, 2021). As much as we might not like the idea that clandestine welfare could develop in high-income or industrialised countries, we might as well find similar structures of parallel welfare governance in those countries. As pointed out by Wright (2005), criminal organisations have developed in many ways around the globe, but most of them share common characteristics including illicit forms of protection. Thus, it would be interesting to explore the specific features that illicit actors’ social provision takes in those contexts in which the rule of law and state institutions are stronger and accountability mechanisms are more difficult to avoid.

Conclusion

The study of the clandestine welfare aims to recognise illicit groups as welfare providers, especially in the Global South where state institutions are fragile and illicit groups can rival the power of the state. Understanding the capacity of these groups to provide robust social protection and services is key to comprehending many of the social dynamics rooted in low- and middle-income countries. Although provoking, I consider the idea that illicit groups can become a tangible safety net for many individuals as a missing piece in the literature on welfare regimes. The idea that those illicit groups that erode social tissue and hurt society are, in fact, benefactors that intervene in the distribution and redistribution of welfare could be controversial. However, it is not difficult to see how they have built extensive social protection schemes parallel to the formal alternatives of the state.

Considering the growing inequality in modern societies and the retrenchment of the welfare states in previous decades, illicit groups have a protagonist role that should be taken into account when theorising and assessing welfare regimes. In many regions of the world, these groups are no longer marginal actors but a shadow power that builds its own institutions. Hence, clandestine welfare provision might be in many cases a well-developed safety net that catches those individuals unprotected by the formal state. By either direct provision, involuntary actions, or forced interventions, illicit groups can grant welfare access to a large number of people, even if this has a great cost to society in the long run due to the violent methods to achieve it.

Even though this article has presented some illustrative cases about the different social protection mechanisms used in the clandestine welfare, there are still many aspects that could not be clarified. For example, to what extent this form of welfare shapes people’s experiences. Likewise, the legacies of the institutions created by illicit groups after they dissolve or disappear remains an open question. Equally, it is still unclear how formal states deal with those parallel welfare regimes and how this might influence state social policies. The above opens plenty of possibilities to investigate the nature of illicit groups and their interrelation with social welfare from a new perspective. Thus, this article aims to serve as a steppingstone towards more systematic research on the clandestine welfare.