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Illicit Economies and Urban Peace: Introduction to the Special issue


Achim Wennmann ,

Graduate Institute of International and Development Studies, CH
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John Collins,

Global Initiative against Transnational Organised Crime, AT
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Tuesday Reitano

Global Initiative Against Transnational Organised Crime, CH
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The Special Issue proposes ‘urban peace’ as a way of thinking about policy responses to the dynamics of crime, violence, and exclusion that are associated with illicit economies. This approach builds on the notions of connectedness, proximity and trust between individuals, different segments of society, and divided urban spaces. It stands in contrast to the emphasis on separation, distance, and enmity associated with securitized, zero-tolerance, or counter-terror approaches. The notion of ‘urban peace’ also emphasises that more pragmatic approaches are necessary to provide leadership on reducing violence and exclusion and on expanding economic opportunities in cities.
How to Cite: Wennmann, A., Collins, J. and Reitano, T., 2021. Illicit Economies and Urban Peace: Introduction to the Special issue. Journal of Illicit Economies and Development, 2(2), pp.72–79. DOI:
  Published on 23 Feb 2021
 Accepted on 04 Jan 2021            Submitted on 04 Jan 2021


All reasonable projections of the evolution of cities suggest that they will have a profound impact on political, economic, and social orders for generations to come (UNDESA 2014; Bello-Schünemann et al. 2017). James Cockayne and colleagues, looking to cities’ future role in violent conflict and transformation, have expressed this reality very directly: ‘The future of violent conflict is urban – because the future of humanity is urban. If we want to prevent future violent conflict, we must prevent violent urban conflict’ (Cockayne et al. 2017: 2). Even if COVID-19 reduces somewhat the throttle on urbanisation processes and perhaps reinvigorates remote or suburban existence in some regions, it is unlikely to halt the inexorable trend towards cities as a fundamental unit of human existence, commerce, and interaction.

By focusing on the ‘illicit’ dimension of urban economies, this Special Issue aims to draw more attention to an important economic space in cities that involves economic interaction around goods and services that are criminalised by states but that connect across the blurred lines of legality and criminality, state and non-state authority, and private and public domains (Schendel & Abraham 2005: 9). Urban connectivity offers significant opportunities for illicit trade and brings tangible development benefits, with cities being the engines of economic growth and trade. However, it also creates parallel openings for illicit trade, which exists in the sinews of its licit counterpart, and which are similarly reliant on the infrastructure cities offer. Cities’ infrastructure embeds them into international markets, empowering criminal networks to form connections with groups operating elsewhere in the country, or indeed overseas, including through diaspora connections. The importance of cities for a wide range of illicit trades, from the trafficking of drugs, to humans and firearms, has been widely recognised. Less focus has been granted to the pivotal role cities play in fostering, or create enabling environments for, connections between illicit markets. Cities engender contexts of poly-criminality which match our understanding of criminal markets as endlessly diversifying to capitalise on new opportunities.

The speed of urbanisation, the presence of illicit actors, unprecedentedly high levels of irregular migration, and weak governance systems offers a partial explanation of why some fast-growing cities are already facing increasing pressures from violence, crime, and exclusion, especially but not exclusively in emerging and developing economies. The problems associated with these phenomena are growing faster than ready solutions to them. In the face of this challenge, security policies are rarely aligned with innovative solutions to reshape public and semi-public spaces in a way that complements violence reduction strategies or the achievement of peaceful and inclusive societies. Indeed, securitised and heavy-handed approaches remain very popular among politicians, particularly at times in which autocratic forms of governance are more common (Lührmann & Lindberg 2019; V-Dem Institute 2020).

This Special Issue highlights the necessity of refocusing conceptual lenses on the economic dimensions of violent conflict in urban environments, and their associated policy responses. It builds on the long record of scholarly work on informal, parallel, or illicit economies emanating from development economics (Lewis 1954), anthropology (Hart 1973; MacGaffey 1991; Nordstroom 2004) and political science (Duffield 2001; Naylor 2002; Andreas 2004). It connects to the current debates on the importance of making cities sustainable to prevent adverse global impacts in the environmental, social, and political realm (UN-Habitat 2020), as well as to discussions in more specialised policy circles. These include, for instance, debates on drug policy about the application of supply reduction goals, and how development-based approaches in rural settings could be translated to illicit economies in urban environments (Brombacher & Westerbarkei 2019). Further they extend to the emergent discussion of harm minimisation in the context of urban drug market violence (Shaw 2019).

What is more, this Special Issue also connects to the literature on urban peacebuilding (Björkdahl 2013; Björkdahl & Kappler 2017; Wennmann & Jütersonke 2019; Gusic 2019) as well as to discussions about translating violence reduction, conflict prevention, and peacebuilding approaches for application in contexts affected by organised crime (Cockayne 2013; von der Borgh & Saventije 2014, Wennmann 2014; Alvazzi et al. 2015; Moncada 2016; Brotherton & Gude 2018; Van den Eertwegh 2019). By focusing on the political economy dynamics within cities and the roles of illicit economies in shaping violence and exclusion, this Special Issue connects to the evolution of the literature on the political economy of conflict in response to the changing nature and contexts of violent conflict. It thereby constitutes additional research for an emerging sub-field of the political economy of urban conflict (Wennmann 2019; Gusic 2019; Sampaio 2020; Young 2020).

About This Special issue

This JIED Special Issue on illicit economies and urban peace cast a net for contributions to an emerging field of study. The result was a rich catch of policy commentaries and research articles that provide new perspectives on possible responses to illicit markets, violence, and exclusion in cities. These new perspectives are necessary because cities are facing a future of complex challenges. In the coming decades, they will suffer ever more intense sources of shocks and stressors, including, not only the already charted rapid urbanisation and population growth, but also repeated natural disasters, and deep technological transformation. Cities are the new front line of a novel strategic landscape that will absorb the consequences of the multiple, overlapping and simultaneously accruing crises that are projected to shape the next decade (NIC 2012; Baldwin 2019). There is therefore an urgent need for translating new thinking about how cities will manage these complex challenges into actionable responses; and this Special Issue aims to contribute to this objective.

The contributions to this Special Issue focus specifically on the range of responses to illicit economies and associated violence and insecurities. It stands side by side the Special Issue of Estudios Socio-Jurídicos on illicit economies, social mobilisation, and ambiguities, and shares its outlook on the importance of illicit economies. The JIED Special Issue concurs in its judgement that illicit economies are significant economic spaces in many cities because they provide income-earning opportunities across many sectors and large segments of society, and because they regulate the daily life of many people (Gutiérrez Sanin & Rodgers 2020). They are nothing marginal in economic terms but a global phenomenon that plays a crucial role in providing livelihoods and access to essential goods and services (Neuwirth 2011; Young 2020). What is more, the status of ‘illegality’ of illicit economies makes them an important political issue because they act as a reference point for how political parties position themselves regarding forms of governance (Gutiérrez Sanin & Rodgers 2020). This positioning frequently results in illicit economies becoming stigmatised as illegal or illegitimate, and certain neighbourhoods to become categorised as no-go or dangerous areas.

This dilemma of stigmatisation is also reflected in academia where some strands of research have a negative view of informal, illicit, or shadow economies as ‘backward’ or ‘illegitimate’ and hold a separate space from the ‘formal’ or ‘capitalist’ economy controlled by the state that is part of modernisation (Hart 2005: 1, 10). Other strands of research have a more positive view and perceive these economies as the new normal in many emerging and developing markets representing the workplace of 2 billion people or 60 percent of the world’s employed population (Neuwirth 2011; ILO 2018). Conceptually, therefore, researchers and policymakers are facing ‘a terrain riddled with academic disagreement and ideological contestation’ and need to recall that ‘the distinction between formal and informal domains of economic production and exchange is an abstraction that contends with the complexity of reality’ (Schoofs & Lara 2013: 15).

The empirical and conceptual context charted above, is the backdrop to emphasising the importance of finding better responses to illicit economies and that such responses require a broader optic beyond singular focuses on law and order or drug policy. Addressing illicit economies is at the heart of expanding social and economic opportunities at a moment when populations growth and many cities will undergo a period of turbulence. As such, these efforts should be the top strategic and political priority for many countries. While it is well understood that sustainable development will be won or lost in cities, it is much less clear how to win. By bringing together research from scholars and senior policy analysts across different disciplines and sectors, this Special Issue makes the point that policy solutions need to go beyond the answers confined to a particular domain. Crosscutting challenges require crosscutting responses and this Special Issue is a contribution to reflections about such policy adaptation in an era of rapid change.

This Special Issue proposes ‘urban peace’ as a way of thinking about policy responses to the dynamics of crime, violence, and exclusion that are associated with illicit economies. This approach builds on the notions of connectedness, proximity, and trust between individuals, different segments of society, and divided urban spaces. It stands in contrast to the emphasis on separation, distance, and enmity associated with securitised, zero-tolerance, or counter-terror approaches. The notion of ‘urban peace’ also emphasises that more pragmatic approaches are necessary to provide leadership on reducing violence and exclusion and on expanding economic opportunities in cities.

Preparing Cities for the Future: Towards Pragmatic Responses

Research on the role of illicit economies on the shape of socioeconomic and security outcomes highlights a double-edged sword. Whereas illicit economies are often characterised as parasitic and reinforcing of cycles of violence and marginalisation (UNODC 2017) illicit economies can, in other contexts, be viewed as key modalities of development outcomes, albeit with complex implications for political economy outcomes (Gillies et al. 2019). Unpicking these dynamics and understanding the granular impacts of illicit economies on issues of security, local power dynamics, and the impact on patronage and brokerage networks in these contexts is key in moving beyond binary understandings of the interaction between illicit economies and local violence, economic development, and peacebuilding. In just one example, the divergence in outcomes between the illicit drug markets of São Paulo and Rio de Janeiro is a stark spoiler to simple analyses of urban security dynamics (Hirata & Grillo 2019).

What is more, municipal violence reduction, resilience, or inclusion programmes are also facing spatial obstacles in cities. In many contexts, gated communities have kept a wealthier elite and middle class apart from the rest of society, and have fragmented public space further, rather than reinforced it. The resulting ‘architecture of fear’ is driven by property developers and egged on by private security providers (Agbola 1997). Such divisions are well known to peacebuilders. Cities like Beirut, Belfast, Nicosia, or Jerusalem ‘tend to freeze the conflict and remain partitioned regardless of a conflict settlement (…)’. Populations in these cities become ‘socially as well as spatially segregated as temporary barriers have become permanent, and imagined walls have become real’ (Björkdahl 2013: 207, 208; Pfannenstein et al. 2017). This fracturing of urban territoriality has seen the growth of different de-facto authorities with the consequence of splintering cities into different zones of autonomy with their own systems of governance (Rapley 2006; Stepputat 2018).

These realities stand is in stark contrast to the vision of ‘safe and inclusive’ cities propagated for instance by UN-Habitat’s New Urban Agenda or to the ambition of the UN’s Sustainable Development Goal 16 on peaceful, just, and inclusive societies. Many UN agencies and many local actors have sought to counter mano dura (iron fist) policies by developing specific ‘people first’ tools and strategies to address urban vulnerabilities, crime, delinquency, and anti-social behaviours. They have also supported efforts to pursue multi-dimensional and cross-sectoral approaches to citizen security, social integration or social cohesion (OECD 2009; UNDP 2013; UNODC 2017; UN & World Bank 2018; UNDP 2020). Yet these programmes are facing an uphill battle in the new era of populisms and need a lot of creativity to reassert political weight.

Overview of Contributions

This Special Issue aims to strengthen the conceptual and empirical foundations of different policy responses to illicit urban economies as well as to the different types of violence associated with them. It begins with reflections on the application of development-oriented drug policy, local responses to arms smuggling, and granular analyses that offer a basis for policy responses against urban violence. The research articles then continue with an analysis of the collateral impact of heavy-handed drug control approaches in Manila (The Philippines) and three case studies of alternative approaches to transforming illicit economies in Latin America, including in Bogotá (Colombia), San Salvador (El Salvador), and Belo Horizonte (Brazil). This Special Issue then shifts to analysing the nature and responses to different types of violence associated with illicit economies. It first looks at the functions of illicit urban economies for non-state-armed groups in Mogadishu (Somalia) and Karachi (Pakistan), and well as for government elites in Damascus (Syria). It then looks at household-level dynamics of functional markets in Yemen’s war economies as well as the dynamics of community-level businesses and structural violence in Langa, a suburb of Cape Town (South Africa). A case study on Mbizana Local Municipality (South Africa) describes an approach to overcome the trust deficit between municipal authorities and people through participatory process design. The concluding article draws together the findings of this Special Issue and proposes elements for a new research and policy agenda.

This Special Issue starts with two reflections on key policy challenges. Diskul, Collins, and Brombacher explore how development-oriented drug policy responses traditionally targeted at rural areas could be translated into urban settings. It also proposes to position drug policy within larger transformation processes, based on an analysis of the Doi Tung Development Project in Thailand’s Golden Triangle, formerly a major drug production zone. In their analysis of Cracolândia – the open-air drug market in central São Paolo (Brazil), Mendez de Paiva and Garcia describe what could be considered a development-oriented approach to drug markets in the city. The commentary draws together key learning of the Open Arms Project as an example of an integrated drug, health, and social policy-based response to achieve harm reduction. The authors underline that the implementation of such integrated approaches is not only a technical exercise, but also a political process that requires flexibility, pragmatism and smart public communication.

In their commentary on community-based initiatives to control small arms and light weapons (SALW) in Libya, Tartir and Florquin emphasise the role of agency of local actors that shape local SALW initiatives from the bottom up in Az-Zawiyah, Tobruk, and Bayda, despite ongoing volatility. They also highlight the need for integrated approaches. Initiatives need to position weapon-specific projects in the broader efforts on transitional justice or socio-economic interventions. For long-term sustainability, however, responses require frameworks that connect the bottom up with the top-town security sector reform.

Locke underlines the importance of granular local analysis and cross-sector collaboration to tackle violence. The police are not in a position to address violence on their own because urban violence tends to be embedded in a complex struggle to control and govern urban territories. When the police action reinforces violence it even faces the risk of declining perceptions of legitimacy. Locke also underlines the potential value of the UN’s Sustainable Development Goals as a meta-framework to build the partnerships against urban violence.

The series of research articles start with the story of Manila and its violent police campaigns against low-level offenders. It is a story that could be retold in countless other cities where responses to illicit economies primarily involve militarised or heavy-handed interventions. The article by Pangilinan, Fernandez, Quijano and Dizon about Manila’s anti-narcotics campaign in 2016 and 2017 clearly demonstrates the degree of collateral impact on already vulnerable people. Based on household-level data, this article conducts spatial and victim-focused analysis of the anti-narcotics campaign, and the impact of targeted killings on the families left behind. It shows the degree to which a heavy-handed anti-narcotics campaign traumatised families, eroded social cohesion, and pushed many families further into poverty.

The following three articles demonstrate that there are tangible alternatives to heavy-handed approaches that have emerged from experiences in Latin America. In his analysis of street-level peacebuilding in Bogotá, Mantilla shows how street level-bureaucratic and therapeutic policing interventions can work to transform illegal economies. These create their own mechanisms of order and social control but also lead to ‘contested informalities’ in urban areas that are stigmatised through control by criminal groups. Mantilla also highlights the importance of policy coordination to prevent collateral outcomes that harm vulnerable populations controlled by criminal groups.

Van de Borgh’s article shares findings from fieldwork in two gang-controlled neighbourhoods in San Salvador. It deals with the common problem that many parts of cities are not controlled by public authorities. It examines how it is possible to find room to manoeuvre in these contexts, and looks particularly at the role of faith-based non-governmental organisations (FBOs) in violence reduction and community development. In the neighbourhoods studied, Van der Borgh finds that the FBO’s work on violence reduction and community development was enabled by their evangelical identity, the acceptance by and independence from gang and government, their longer-term engagement in the neighbourhoods, as well as a combination of interventions that have social impact and promote moral values. In this way, the article underlines the use of different yet complementary interventions, and the importance of ascertaining which actor is best placed to advance violence reduction and community development in urban areas that are inaccessible to public authorities.

Beato and Velásquez share the results of a network analysis of the participatory slum-upgrading programme Vila Viva at Aglomerado de Serra of Belo Horizonte (Brazil). The study emphasises the important political dimensions of participation between traditional and emerging stakeholder representatives in the community. In this case, traditional activities with long standing roles in the communities were able to consolidate their position by shaping participatory budget planning. The study emphasises the importance of the process driving slum upgrading and of the political dimensions of neighbourhood transformations. Upgrading creates new resources and opportunities that generates new conflict over power and control between traditional and emerging stakeholders in the community. The case study also shows how drug traffickers were able to adapt effectively to new infrastructure developments that facilitated access and circulation through the settlement. It therefore points to the need to better integrate the situational and territorial focus of violence prevention initiatives.

With the next selection of research articles, this Special Issues shifts its analysis to the nature and responses to different types of violence associated with illicit economies. Sampaio highlights the critical function of large cities within or close to conflict zones: that of providing a hub for non-state armed groups to mobilise revenue through illicit economies in support of their political agendas. By studying Al-Shabaab in Mogadishu (Somalia) and the Taliban in Karachi (Pakistan), Sampaio shows how these non-state armed groups have been able to exploit the rising demand for services in cities. In particular these groups have accrued rents from protection payments in highly populated districts with little state presence and from fixed assets due to an increased demand for housing and land. These ‘urban resources’ shape entrenched interests in the perpetuation of illicit economies and therefore represent a significant policy challenge. Kania’s article extends the analysis of ‘urban resources’ in relations to two urban planning projects in Damascus (Syria). In this case, actors are government elites and non-state armed groups as above. The article looks at the urban planning processes of Marota City and Qaboum as examples of localised political settlement negotiations and ‘pragmatic peacebuilding’. It highlights the role of insider mediators in shaping localised elite bargaining that are part of a trajectory of peace formation at the local level.

Huddleston and Wood shift the analysis to the household level as they assess ‘functioning markets’ in the context of war-effected Yemen based on the results of a major survey. Given its fractured territorial control of multiple de-facto authorities, Yemenis rely on the economies controlled by such actors for their essential goods and income. In this sense, these are functional economies because they work to supply essentials, and as a result, reinforce bonds between the population and de-facto authorities. The authors argue that judgments about functional economies should rest on their ability to provide access to essential goods and income and to promote a peaceful resolution of conflict. As a basis for more nuanced policy responses to illicit economies, the article concludes with a decision chain for policy makers. It highlights the importance of flexibility to strengthen functional markets when these are the population’s only source of essential goods and services, but also the need to act with determination when these are a source of violent rent-seeking detrimental to peace.

Ganson and Hoelscher approach the topic of ‘illicit economies’ from the perspective of community-rooted micro, small, and medium-sized enterprises (MSMEs). They compare frameworks for understanding MSMEs with research that emerges from the stories of respondents from Langa, a suburb of Cape Town (South Africa). Both approaches stress the importance of questioning the oversimplifying binary representations of legal/illegal, licit/illicit, regulated/unregulated, or formal/informal of urban economic spaces as a basis for eventual policy responses. The authors also underline that transformative change of urban economies should happen through inside-out approaches that acknowledge and unpack MSMEs as part of a complex local social and political system. Misinformed outside-in approaches can adversely affect community resilience and exacerbate violence as outsiders intervene in competitive local markets systems they do not understand.

The case study of Mbizana Local Municipality of the Eastern Cape Province in South Africa by Dube, Mnguni and Tschudin reflects on the possibilities of responding to an underlying challenge in so many cities: the trust deficit between local authorities and community members. In the previous study, Ganson and Hoelscher described community perceptions of authorities as a source of restraint and control, rather than of support and development; not to mention the perception of the police that are seen as a source of violence, theft, rape, and racketeering. In Mbizana, community members perceived local authorities as responsible for poor service delivery, mismanagement, and corruption. The article describes the transformative role of a participatory process and of good governance mechanisms as a means to restore confidence of the community in municipal authorities. The authors particularly highlight the limitation of so-called ‘invited spaces’ for lip-service consultations controlled by government, and set out a methodology for inclusive and participatory dialogues to rebuild trust between community and municipal authorities.

The concluding article by Wennmann draws together the findings of this Special Issue. It highlights that policy responses to illicit economies should build on the foundations of a broader socio-economic agenda. This approach situates responses against illicit economies at the heart of expanding social and economic opportunities in informal economic spaces and encourages policymakers to consider a bigger toolbox beyond law and order or security instruments. While the article emphasises capability-focused, crosscutting, and process-oriented programming, it also urges that neighbourhood and municipal leaders should check feasibility of such approaches in the face of the mix of existing (or absent) capabilities in their own context. The article also underlines how illicit economies create their own non-state forms of order in which violence has a functional purpose and reflects on urban political settlements as a means to regulate and transform these orders. The article concludes this Special Issue by charting a case for a new policy agenda on urban peace and emphasises that in the face of the pressures within rapidly growing cities there is no time to lose to adapt and deploy novel approaches to help cites sustain peace.

Competing Interests

The authors have no competing interests to declare.


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