Hybrid Governance in Northeastern Mexico: Crime, Violence, and Legal-Illegal Energy Markets

• DOI: 10.1177/0094582X20975016
• Author: Marcela López-Vallejo,María del Pilar Fuerte-Celis
• Published date: 01 January 2021
• Date: 01 January 2021
• Subject Matter: Articles

https://doi.org/10.1177/0094582X20975016

LATIN AMERICAN PERSPECTIVES, Issue 236, Vol. 48 No. 1, January 2021, 103–125

DOI: 10.1177/0094582X20975016

© 2020 Latin American Perspectives

103

Hybrid Governance in Northeastern Mexico

Crime, Violence, and Legal-Illegal Energy Markets

by

Marcela López-Vallejo and María del Pilar Fuerte-Celis

Despite the presence of organized crime in northeastern Mexico, the region has a func-

tioning economy that attracts new investment to energy projects, especially those involv-

ing fossil fuels. This may be because legal and illegal markets there tend to overlap and

function under hybrid governance schemes. The hybridization of governance is an expres-

sion of the fact that legality and illegality are embedded in contemporary capitalist mar-

kets. This embeddedness is not an abnormal condition but the way in which societies deal

locally with organized crime, and violence serves as the primary regulatory mechanism in

disputed territories and markets.

A pesar de la presencia del crimen organizado en el noreste de México, la región tiene

una economía funcional que atrae nuevas inversiones a proyectos energéticos, especial-

mente aquellos relacionados con combustibles fósiles. Esto puede deberse a que, ahí, los

mercados legales e ilegales tienden a solaparse y funcionar en el marco de los sistemas de

gobernanza híbrida. La hibridación de la gobernanza es una expresión del hecho de que la

legalidad y la ilegalidad están incrustadas en los mercados capitalistas contemporáneos.

Dicha incrustación no es una condición anormal, sino la forma en que las sociedades se

ocupan localmente del crimen organizado, y la violencia sirve como el principal mecanismo

regulador en los territorios y mercados en disputa.

Keywords: Hybrid governance, Legal-illegal markets, Fossil fuels, Organized crime,

Northeastern Mexico

This article addresses a puzzling reality: despite the presence of organized

crime, some regional economies prosper, infrastructure develops, and new

investment is attracted to strategic economic sectors. This is the case in north-

eastern Mexico, where, although there are several drug cartels, fossil-fuel proj-

ects are also being actively developed. We argue that this may be because

economic activity there is taking place through an overlap of legal and illegal

markets made possible by hybrid governance schemes. Our main finding is that

such hybridization may help manage and reduce violence. From this perspec-

tive, hybrid governance is not a marginal or abnormal activity but a common

socially embedded practice resembling those involved in the traditional concept

of governance though with different goals. We will redefine governance, discuss

Marcela López-Vallejo is a full professor in the department of Pacific-Rim Studies and in the

Center for North American Studies at the Universidad de Guadalajara; she is Fellow at the North

American Research Initiative. María del Pilar Fuerte-Celis is an assistant professor at the

Geospatial Information Sciences’ Research Center (Centro Geo) and Catedrática CONACYT.

975016LAPXXX10.1177/0094582X20975016Latin American PerspectivesLópez-Vallejo and Fuerte-Celis / Hybrid Governance in Northeastern Mexico

research-article2020

104 LATIN AMERICAN PERSPECTIVES

its enforcing mechanisms, and identify its objectives in contexts in which

authority shifts toward organized crime and “extralegal” institutions emerge

(Cross and Peña, 2006: 52). Thinking of governance as a hybrid process is useful

for explaining wide-ranging socioeconomic relations at local, national, or trans-

national scales while analyzing the grey areas between legal-illegal practices,

capitalism, and violence.

As in other Mexican regions, illegal markets, rules, and authority in the

Northeast can be traced to constant power rearrangements resulting from ter-

ritorial and market disputes among criminal groups. This reorganization

implies a “criminal accumulation of capital which takes advantage of the grey

area between legality and illegality as an arena for the increase of value and

control” (Fuentes Díaz, 2018: 131). “Illegality” here must be differentiated from

“informality,” which describes activities that are legal but eschew state regula-

tion (e.g., avoiding taxes or failing to provide consumer guarantees). Scholars

point out that informal economic activities indicate participants’ inability to

afford the costs of regulation (Cross and Peña, 2006: 51; Helmke and Levitsky,

2014). While informal markets avoid the law, they are considered legitimate

and socially accepted because they provide affordable prices and well-being to

the most defenseless social groups in emerging economies such as Mexico

(Centeno and Portes, 2006; Felbab-Brown, 2018). In contrast, illegal markets are

the result of criminal activities, producing illegal products outside the state

regulatory system. Illegal markets develop an extralegal regulatory system

based on violence.

There are two types of illegal markets using violence as their main enforcing

mechanism. In the first there is violent acquisition in which only legal products

are exchanged (e.g., reselling of contraband), while in the second the products

and the sales themselves create violence (e.g., arms and human trafficking and

illegal drug markets). The leaders in the latter type of market tend to be crimi-

nal organizations with the power to bribe and make violent threats. However,

they also use informal and even legal mechanisms to diversify their activities,

among them financial instruments or products that are legal in other countries

but illegal in Mexico (e.g., arms legally produced or sold in the United States).

This phenomenon creates criminal corporations with extralegal characteristics

with which they extend their business, influence, and power transnationally

(Fuentes Díaz, 2018: 129; Fuerte-Celis, Pérez, and Córdova, 2018).

We contend that such extralegal schemes function under hybrid governance.

Although the relationship with informal markets is key to the development of

hybrid governance, here we focus upon the way legal and illegal markets relate,

since it is within this relationship that violence arises. We employ spatial analy-

sis to territorialize violent expressions of the overlap between legal and illegal

markets in northeastern Mexico. We consider control over the territory as nec-

essary for legal-illegal embeddedness to function, since it represents control

over the appropriation of local rents (Correa-Cabrera, 2017; Jagannathan, 1987:

71–74).

There is a dearth of literature on hybrid governance, and what little there is

focuses mainly on processes during and after civil wars (especially in Africa),

where state reconstruction has been the main goal. In contrast to these cases

and despite increasing violence, Mexico’s northeastern states have booming