Pax Monopolista and Crime: The Case of the Emergence of the Primeiro Comando da Capital in São Paulo

Abstract

Pax Monopolista is the idea that the domination of illegal markets by a single powerful criminal organization is conducive to pacification. Test the Pax Monopolista hypothesis using the case of Primeiro Comando da Capital (PCC)—a prison gang turned drug trade organization—in the city of Sao Paulo. Difference-in-difference. Using unique data to identify PCC entry in geographically well-delimited but socially fragile areas—namely, favelas—we explore variations in the timing of the expansion the PCC across the city of Sao Paulo to establish the impact of PCC presence on crime. PCC presence is associated with an 11% reduction in violent crime in the favelas that PCC entered during the period 2005–2009. No discernible impact on property crime was found. Results are compatible with the main theoretical reasons why the monopolization of criminal activity may lead to a reduction in crime.