1 s2.0 S1045235422000910 Main

Critical Perspectives on Accounting 95 (2023) 102506
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Critical Perspectives on Accounting

journal homepage: www.elsevier.com/locate/cpa
Full length Article
Fragile assets: Street gangs and the extortion business

Dean Neu
Schulich School of Business, York University, Canada
A R T I C L E I N F O A B S T R A C T
Keywords: This study examines how El Salvadoran street gangs make assets fragile and, hence, amenable to
Asset valuation extortion in the territories that they control. Starting from prior Foucauldian inspired accounting
Extortion research and the literature on stationary bandits, we propose that social actors and their assets are
Sovereign power
simultaneously enmeshed in relations of government and relations of sovereign power. Using
Stationary bandits
longer-term participant observation data as well as interviews and archival data from El Salvador,
the study shows how people and assets are placed into sovereign power relationships, thereby
helping to make assets (and people) fragile and thus facilitate extortion. The study also suggests
that it is the Salvadoran state, through its taxation practices and its failure to nurture marginal
territories, that creates the conditions of possibility for the extortion business.
This study examines how street gangs involve assets in their extortion activities within the territories that they control. The study
focuses on two criminal organizations—the Mara Salvatrucha and Barrio 18—that operate in the Northern Triangle countries of El
Salvador, Guatemala, and Honduras as well as in the United States (Savenije, 2007). These two street gangs—referred to as “pandillas”
or “maras” in the communities that they operate—are responsible for most extortion activities in the Northern Triangle area, with
estimates suggesting that the amount of extortion collected exceeds $650 M annually (Dudley & Lohmuller, 2015). Starting from prior
Foucauldian-inspired accounting research as well as the literature on stationary bandits (Olson, 1993), we propose that social actors
and their assets are simultaneously enmeshed in multiple relations of sovereign power as well as relations of government. Street gangs
use technologies of visibility, including proxies for people and things that might otherwise be difficult to see, in combination with
technologies of sovereign power to accomplish extortion. At the same time, people living in marginal territories are also subject to the
sovereign power of the Salvadoran state and juridically-based forms of government. Using longer-term participant observation data as
well as interviews and archival data from El Salvador, the study foregrounds how people and their assets are targeted by street gangs.
The study also draws attention to, but does not study, the role of democratically elected governments in creating the conditions of
possibility for extortion.
There are three motivations for the study. First, the study examines how assets become involved in extortion activities. In many
parts of the world, extortion is an organized, routine economic activity that has negative consequences for the individuals, businesses,
and communities that bear the associated direct and indirect costs. While extortion is a billion-dollar business that is prevalent in the
South—and to a lesser degree in North countries (Chin, 2000; cf. Chin et al., 1992; Gambetta, 1993)—almost nothing is known about
how assets are identified, valued, and made fragile. Much of the previous research on extortion has been analytical rather than
empirical, often focusing on modeling the extortion process (Konrad & Skaperdas, 1997, 1998). Until recently (Brown et al. 2021;
Ponce 2021), there has been little on-the-ground research on extortion and the research that has been conducted has not focused on
asset-related processes. The work of Chin and colleagues, for example, used a survey approach along with a small number of interviews
to understand the patterns of intimidation within New York’s Asian communities (Chin et al., 1992, Chin et al., 1993). Olken and
E-mail address: dneu@yorku.ca.
https://doi.org/10.1016/j.cpa.2022.102506
Received 4 April 2021; Received in revised form 10 July 2022; Accepted 18 July 2022
Available online 1 August 2022
1045-2354/Crown Copyright © 2022 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
D. Neu Critical Perspectives on Accounting 95 (2023) 102506
Barron (2009) had surveyors accompanying truck drivers in Indonesia to better understand the market structure of extortion pay
ments. Ochoa-Díaz and Páramo (2021) used archival data to analyze the profile of extortion cases in Colombia. This research is
important and useful, but it does not help us to understand the micro asset-related processes of extortion. Other than a recent study by
Neu (2019), this is the first study to our knowledge that explicitly focuses on the role of assets within the extortion process. The paucity
of studies on extortion generally, and asset-related processes, is not surprising given the difficulties of gaining access to the participants
(cf. Gambetta 2011, p. 3).
Second, the study is motivated to understand how social actors and their assets are always simultaneously enmeshed in multiple
power relations. People and assets are ‘subject to’ these relations in varying degrees, depending on both the reach of technologies of
visibility into different domains of activity, as well as the resources available for mitigating the potential impacts of such relations. In
North countries, we tend to assume that relations of governance are dominant and thus that assets are governed by quasi-legal reg
ulations that mediate how assets are acquired, protected, and used. While the current study acknowledges that neoliberal gov
ernmentality is important, especially in North settings, we also propose that technologies of sovereign power are germane in both
North and South settings. Within El Salvador, we propose that street gangs are a form of parallel control and extortion a form of parallel
taxation that is practiced by what Olson (1993) calls stationary bandits. Street gangs use sovereign power to dominate territories and to
charge extortion while democratically elected governments use the police, the military and paramilitary allies (El Salvador Noticias,
2014) to attempt to control these same territories as well as the judiciary to charge and collect taxes. What differs between these two
groups are: how assets are defined, the practices that are used to make assets visible, the forms of sovereign power that are directed at
assets to encourage subjects to pay, and who, within the territories, receives the benefits from the collected monies. While the current
study focuses on the activities of street gangs and their use of sovereign power, the analysis draws attention to the ways that gov
ernments and their allies also use sovereign power to subjectify social actors and their assets.
Our final motivation, and one that follows from our commitment as critical researchers, is to study a topic that is vitally important
to people living in the South. Central America is currently-one of the most dangerous places on earth, with per capita homicide rates
almost 100x higher than North countries. In 2015, for example, the per capita homicide rate for El Salvador was the highest in the
world. San Salvador and Pedro La Sula (the capitals of El Salvador and Honduras, respectively) are routinely ranked as two of the most
dangerous cities in the world, ahead of places like Kabul, Afghanistan (UNODC, 2022a, 2022b). The levels of violence—with its life and
death outcomes—that accompany extortion encourage the constant exodus of people from the area (Sviatschi 2022, p 33). As the
analysis highlights (see also Ponce 2021), the consequences associated with extortion are unequally distributed in that it is the working
poor and the inhabitants of marginal communities, those who have the least ability to protect their assets, that bear most of the
consequences. Somewhat ironically, this is the very same group that is also disadvantaged by the modes of sovereign power and
neoliberal governance practiced by the El Salvadoran state.
Our on-the-ground research on street gangs within the Northern Triangle started about fifteen years ago when we were simulta
neously studying World Bank supported tax reforms and the operation of fast-fashion maquiladoras. These two studies led us down to
the level of the street and into the lives of people living in marginal communities. These personal experiences inform the current study
in multiple ways. The provided analysis attempts to strike a balance between on-the-ground experience, occasionally utilizing a first-
person narrative perspective, and theoretically informed analysis. At the risk of stating the obvious, analysis and vulnerable human
lives are bound to intersect—especially when discussing the practices and consequences of sovereign power.
We turn now to the theoretical frame that guides our analysis. Subsequently, we will provide an overview of the Northern Triangle
region, touched upon in our introductory remarks, followed by the methods section. The case analysis itself is divided into thematic
sections which map and analyze asset-related practices. The study concludes with a discussion of the implications, including how assets
are made into subjects as well as the policy implications for South countries such as El Salvador.
1. Subject to extortion
The current study focuses on how people and things become subject to extortion within the physical spaces where they are located.
Our starting premise is that the sovereign power exercised by street gangs, in conjunction with visibility practices directed primarily at
assets, make assets fragile and, hence, make people more likely to pay extortion. We also propose that the business of extortion
(Schelling, 1971) cannot be understood without also considering the role of formal governments in these processes since governments
exercise power over these same territorial spaces. Our theoretical framing starts from two inter-related streams of research. First, we
draw upon Foucauldian-inspired accounting research which suggests that accounting technologies help to enact governance, in part by
providing a set of visibility practices that penetrate into and, hence, see the domains of activity in which social actors and assets
operate. Second, we borrow from the literature on stationary bandits (Olson, 1993) which provides an alternative way to think about
both the continuing salience of sovereign power as well as the taxation activities of street gangs and democratically elected govern
ments. In the remainder of this section, we elaborate on the conceptual ideas and tools that guide the subsequent analysis.
Shortly before his death in 1984, Foucault, under a pseudonym, wrote an entry for the dictionary of philosophy on Foucault,
suggesting that his life’s work can be read as a history of subjectivization: the ways that people and things are both subject to regimes of
power and are acting subjects (Florence, 1984). He foregrounds the recurring themes that underpin his empirical studies. In addition to
mentioning the duality of subjectivation practices, the essay alludes to the historical shifts in regimes of power and to the different
types of practices that help to construct and enmesh acting subjects in relations of power. This is useful to our current study because it
draws attention to both the different regimes of power and the ways that these regimes work to subjectify the acting subject.
Within Foucault’s writings, there is a distinction between sovereign power and governmentality. The description of the vivisection
of Damien in the introduction to Discipline and Punish is often taken as the prototype of sovereign power (1977, p. 3). He uses this
2
detailed affective description to set up his thesis regarding the historical shift away from forms of sovereign power—grounded in
territories controlled by the king and directed at the bodies of his subjects—to disciplinary forms of power. Foucault’s subsequent
writings complement and build upon Discipline and Punish, offering a genealogy of the regimes of power and the movements from and
among these regimes. Within the accounting literature, the notion of governmentality—as developed in Security, Territory, Population:
Lectures at the Collège de France, 1977–78 (Foucault, 2007)—is often assumed to be the endpoint of Foucault’s genealogy on state power
(see also Foucault, 1991).
Governmentality, as outlined by Foucault and interpreted by accounting scholars such as Miller (cf. Miller & Rose, 1990), proposes
that accounting technologies help to govern the conduct of conduct.1 Accounting not only helps to translate the vague ideas of pol
iticians and bureaucrats into programs of government but also functions as a visibility machine that illuminates distant sites and that
thus enmeshes these sites within relations of power (Carmona et al., 2002; Preston et al., 1997; Robson, 1992).
Prior work on governmentality is salient. For example, on a general level, it highlights how things such as assets, as well as people,
are simultaneously enmeshed and constructed by technologies of government. Assets are constructed by regulations that define what
economic things will be recognized as assets and how these assets will be valued (cf. Ellwood & Greenwood, 2016). For example, the
movement from country-specific rules such as GAAP to more global rules such as IFRS, as well as the changes within these different sets
of rules, illustrate how assets are constructed by regulatory regimes (cf. Richard, 2015). These regulatory regimes, as well as more
general taxation and legislative regimes, influence how assets are allowed to operate. As prior research highlights, accounting tech
nologies help to govern the conduct of conduct through processes that differentiate among people and things and thus that make the
position of some assets and people less precarious and others more precarious (Graham, 2010; Graham & Grisard, 2019). This idea that
the definition of accounting terms such as revenues, expenses and asset are interested, partisan constructions was previously artic
ulated by Tinker (1980) and Cooper and Sherer (1984) in their work on the political economy of accounting.
Prior governmentality research also draws attention to the ways that accounting technologies function as visibility machines,
making certain aspects of assets and their functioning visible (Hopwood, 1983, p. 301). An important idea here is that accounting
proxies both stand in for visual observation and draw attention to the characteristics of social actors and assets that cannot be seen
through visual observation (cf. Carmona et al., 2002). These accounting proxies are co-produced by social actors and systems of in
formation insofar as social actors first construct information systems, then use the resultant system outputs (cf. Laguecir & Leca, 2019).
Finally, these previous studies foreground the ways social actors use accounting to work with, and around, technologies of governance.
Accounting technologies are productive in two ways: in enacting governance, and in using accounting to respond to regimes of
governance (cf. Oakes et al., 1998, Ravenda et al., 2019). Not surprisingly, the ability of social actors to partially avoid being subject to
accounting technologies and to productively use accounting technologies is stratified.
While accounting often functions as a technology of governance, we propose that sovereign power cannot be ignored. Within South
and North countries alike, sovereign power is embedded within the practices of government and operates directly against certain
people and things. Furthermore, in territories like the one we examine, street gangs as well as the democratically elected government
attempt to exercise sovereign power over the same group of people and their assets. As the subsequent analysis highlights, it is specific
ways that these two groups attempt to exercise power that impact when and how extortion is practiced.
To develop this argument, we draw upon Olson’s notion of stationary bandits (1993) because we think that this line of research
provides a partial but useful counterpoint to Foucault’s narrative regarding the movement away from sovereign power to gov
ernmentality. Like Foucault, Olson provides a historical narrative regarding the trajectory from sovereign power exercised by a queen/
king over a territory to neoliberal, democratic governance. Olson’s narrative argues that sovereign power becomes possible when
peripatetic bandits become stationary: that is, when they stop moving and focus on dominating a specific territory. In the words of
Olson:
Under anarchy, uncoordinated competitive theft by ‘roving bandits’ destroys the incentive to invest and produce, leaving little
for either the population or the bandits. Both can be better off if a bandit sets himself up as a dictator—a ‘stationary bandit’ who
monopolizes and rationalizes theft in the form of taxes. (1993, p. 567)
It is this act of becoming stationary that facilitates the exercise of sovereign power—i.e., having unlimited influence over the people
and things within a territory—and, hence, the ability to practice what Olson calls organized theft. In part, this happens because the
stationary bandit’s decision horizon, compared to a roving bandit, changes, and becomes longer term (Henn et al., 2021; Sánchez de la
Sierra, 2020. This change encourages the sovereign to re-invest some of the collected tithes back into the territory.
This notion of stationary bandits is a useful addendum to Foucault’s discussion of sovereign power and governmentality and
germane to the current for study-three reasons. First, it foregrounds how the presence of almost unlimited sovereign power over people
and things within a territory makes possible longer-term forms of organized theft while, at the same time, suggesting that the style of
thievery is contextual. These differences include: the types and amounts of tithes charged to different territorial inhabitants, the
proportion of the collected monies that are re-invested in the territory, the territorial inhabitants that benefit from the re-investments
as well as how sovereign power is exercised and against whom. These differences are, in part, associated with whether the stationary
bandit is a rebel group (Mampilly, 2007), street gang (Holland, 2015), the mafia (Sabetti, 2011) or warlord (Shortland & Varese, 2016)
as well as whether there is also an active formal state who is trying to exert control. These different groups of social actors not only have
different decision horizons but also different checks and balances on the visible, capricious exercise of sovereign power against
1
We assume, following from Nealon (2007) and others that governmentality significantly overlaps with what Foucault refers to as bio-power.
3
territorial inhabitants (cf. Magaloni et al., 2020). Furthermore, as the current study on street gangs hints at, the ability to exercise
sovereign power over a territory can be contested by both a democratically elected government and rival bandits.
Second, the literature on stationary bandits, when read in conjunction with governmentality research, suggests that assets are
enmeshed in two different types of sovereign power relationships. On the one hand, people and assets are subject to the capricious
exercise of sovereign power in that stationary bandits can decide to take action against someone or something on a whim. The as
sassinations, rapes and tortures carried out by different groups of ‘strongmen’ in different parts of the world are examples of the
exercise of this type of sovereign power (cf. Henn et al., 2021). Similarly, governments can exercise sovereign power through use of the
army against certain population segments (cf. Mathieson, 2020) as well as by facilitating the activities of paramilitary groups in
marginal communities (Walsh et al., 2018). The key point here is that the exercise of sovereign power is often extrajudicial: that is,
without any legal proceedings or formal judicial process. We will refer to this form as direct sovereign power.
On the other hand, sovereign power can be indirect. In this form, sovereign power is embedded within administrative and judicial
processes and is used to encourage people to comply with administrative rules. For example, tax evasion and other financial crimes are
punishable by periods of incarceration. Similarly, assets can be “seized”, such as in the case of asset forfeiture laws, as well as
“destroyed”, such as in the case of contraband and drugs (Cassella, 2018; Mughan et al., 2020). These examples draw attention to the
ways that embedded sovereign power and the associated threat of force help to encourage compliance. Within the extortion context
that we study, street gangs do not rely upon indirect forms of sovereign power. The Salvadoran government, in contrast, uses indirect
sovereign power to underpin the taxation system (Inter-American Development Bank, 2010) but also uses and encourages the exercise of
direct sovereign power against people living in gang-controlled territories.2 Although we do not study activities of the Salvadoran
government and its allies directly, its activities are part of the frame within which the extortion economy works.
Third, the stationary bandit literature raises the question as to whether democratically elected governments continue to operate as
stationary bandits. On the one hand, research in this genre assumes that stationary bandits are a transition point on the way from
anarchy to democracy. Wantchekon, for example, uses El Salvador to illustrate why combatants in the long-running civil war decided
to engage in peace talks in the late 1980s and early 1990s and how the transition to democracy resulted in less tax expropriations by the
democratically elected government, compared to previous periods (Wantchekon, 2004, p. 21). On the other hand, research also ac
knowledges that democratically elected governments sometimes continue to operate as a more benign type of stationary bandit. For
example, Briscoe (2008) suggests that it is the existence of ‘parallel states’ consisting of the intersection of criminal networks, poli
ticians and bureaucrats that encourages democratically elected governments to act as stationary bandits. This observation is consistent
with Johnston’s research on corruption which emphasizes that even the best functioning democracies rely on forms of influence
politics whereby important individuals and corporations can funnel monies to politicians to ensure that beneficial policies are enacted
(Johnston, 2005, 2015). The notion of stationary bandits—and especially the processes of governance utilized by democratically-
elected governments—is important to the current study because it raises questions as to who benefits from the way that de
mocracy, as well as extortion, functions in El Salvador (see also Hanson, 2000). Similar to our previous point, these processes of
governance and the social groups that benefit from and are disadvantaged by extortion are part of the frame and, thus, must be
considered.
2. Assets and proxies
A key premise of the current study is that the ability to exercise sovereign power allows street gangs to define what counts as an
asset and to frequently involve assets in taxation activities. However, as the preceding section hints at, it is important to define what we
mean by the term assets. Prior accounting scholarship tends to adopt either a narrow or broad definition of accounting assets. The
narrow definition accepts the definition provided by standard-setters in the form of GAAP or IFRS whereas the broad definition ac
knowledges that some things that have value to a business are not included in the financial statements and also that the ability to name
something as an asset involves the exercise of (sovereign) power. The current study adopts a broader view of assets that is consistent
with previous literatures on extortion and stationary bandits. More specifically, we use the term assets to refer to both judicial and non-
judicially defined things that have ‘value’ to someone and that sovereign powers can put at risk. Assets may be useful in generating future
revenues—such as in the case of a piece of equipment or a building for a store or factory—and may be recorded in the formal ac
counting records of the company. As mentioned previously, such assets are judicially defined in that the definition follows from
standard-setting guidelines like IFRS or GAAP. Assets also include items that help to generate future revenues but do not appear in the
formal accounting records (perhaps because they don’t qualify as a transaction) such as human resources (i.e., employees) and even
customers since it is these groups that provide current and future revenue streams. Finally, assets may be much more personal, both in
terms of physical things like houses and cars—as well as family members. This definition incorporates economic assets that help to
generate future revenues (regardless of whether they are recorded in formal accounting records) as well as personal things that have
value to the business owner. This latter group of assets doesn’t satisfy the IFRS/GAAP entity principle, but these personal things do
impact on how business resources will be used (i.e., to pay the extortion amount). As the subsequent case illustrates, the threat to
2
The claim that the Salvadoran government and its allies use direct sovereign power against people living in gang-controlled territories is
supported by multiple investigative reports. The San Blas massacre that occurred in 2015, for example, illustrates how the police often (inadver
tently) target and sometimes kill poor youth under the guise of gang control (Valencia et al., 2015a). The 2017 International Crisis Group report
provides a good summary of the politics of perpetual violence in El Salvador whereas Walsh et al. (2018) draws attention to the links among not only
the police and paramilitaries but also how the United States may be funding some of these activities.
4
exercise direct sovereign power against personal things encourages people to use their business assets to pay the extortion amount.
A review of current forms of taxation used in El Salvador and elsewhere illustrates how income tax, sales tax, property and business
taxes, and entry taxes such as duties frequently involve assets. In the case of income tax, taxation starts from an explicitly economic
mindsight where investments in capital assets help organizations to increase revenues and/or decrease expenses thereby generating
income (i.e., the definition of assets used by IFRS and GAAP). In general terms, taxation authorities start from the net income before
depreciation figure reported in the financial statements and then deduct a portion of the financial statement asset values (either
through capital cost allowance or investment tax credits) to arrive at a taxable income and income tax payable number. These income
tax calculations directly involve financial statement assets in the calculations, using the value and the characteristics of the asset (i.e.,
when the asset was purchased and its purpose) to determine taxes payable.
Sales taxes also presume a relationship between the amount invested in assets and the amount of revenues that will be generated
since larger investments in assets should, all else equal, result in greater revenue and, hence, larger sales tax amounts. This connection
between sales tax and assets becomes even more explicit when taxation authorities use the value and characteristics of assets to
determine whether a business needs to charge sales tax and whether the sales tax paid on assets can be netted against the sales tax
collected on the sale of products and services. El Salvador, for example, has a special exclusion category where companies do not have
to charge and collect sales tax if the value of assets employed in the business is less than $2,287 USD (Ernst & Young, 2022, p. 519). For
this special exclusion category, it is not necessary that the assets appear in a set of financial statements. El Salvador also allows
companies to net the sales tax paid on the purchase of ‘eligible’ assets against sales tax collected (Ernst & Young, 2022, p. 522). The
Ernst and Young (2022) on indirect taxation highlights that these two types of asset-related adjustments to the amount of sales tax and
VAT tax payable occur in multiple countries.
Like income tax and sales tax, geographic location-based taxes use the value and characteristics of assets to determine the amount
of taxes payable. Property and business taxes, for example, vary depending on where the asset is located, when it was purchased, and
what it will be used for (Kenyon et al., 2012). Very large corporations often benefit from such reductions in property and business taxes
even though empirical research suggests that the economic benefits to the community are much less than the amounts of taxes foregone
(Kenyon et al., 2012, p. 3). Finally, geographic location entry taxes such as customs and duties also involve assets in that the amount of
tax payable depends on the type of merchandise entering, the value of the merchandise, the mode of transportation used and where the
merchandise came from (cf. USAID, 2008). Like the preceding types of taxes, location-based taxes both target assets and use the
characteristics of assets to calculate about the amount of tax that needs to be paid.
This brief review of the different types of taxation highlights how taxation activities frequently involve assets. Sometimes the
definition of assets used in the calculation of taxes explicitly aligns with IFRS and GAAP definitions and sometimes the asset value is
taken directly from the financial statements. However, as the example of the sales tax ‘special exclusion’ illustrates, this does not have
to be the case. Rather, taxation authorities have the sovereign power to name what will count as an asset and how the value and
characteristics of the asset will impact on the calculation of the tax. For this reason, is important to explicitly acknowledge that the
definition of what counts as an asset is always arbitrary, being the outcome of a series of power relationships (cf. Cooper & Sherer,
1984; Tinker, 1980). In the study that follows, we focus on how streets gangs involve assets within their extortion activities. As the
subsequent analysis illustrates, assets become involved in multiple ways.
Not surprisingly, systems of visibility are necessary for involving assets. These systems of visibility try to see assets, including their
connection to people and other things. These ways of seeing almost always rely on proxies for value because it is difficult to see how
much a business has ‘in the bank’ and impossible to see expected future cashflows (and hence the value of the business). Sometimes
these proxies are seen through the visual observation of an ‘asset stock’ (i.e., the characteristics of a building owned by the business), or
the flow associated with an asset (i.e., the number of people entering the business). Sometimes the proxy is an accounting inscription
that has been taken from the financial records of the business. Prior extortion research has tended to focus on either describing the
extortion context, measuring the economic consequences, or modeling the extortion process rather than examining how assets are
identified, valued via proxies, and made fragile. This said, some prior on-the-ground research does imply that the visual observation of
proxies based on stocks and flows is more common than is the use of accounting inscriptions taken from financial accounting records
(Choo & Grabosky, 2013, p. 486; cf. Sabates-Wheeler & Verwimp, 2014, p. 1482).
Like previous extortion research, we assume that threatening to use violence against valued assets facilitates extortion. Fragile
assets are assets that are “delicate”, “easily broken or damaged”, and “weak and uncertain” (Oxford Learners Dictionary, 2022): in
other words, things that need to be treated with care and protected. Assets are made fragile when proxy information about an asset is
placed alongside a contingent threat to use force to break or damage something or somebody. Proxy information signals to the
extortion target that the street gang knows something about an asset and its value to the business owner. This knowledge, in turn,
allows the street gang to state: “If you do not pay extortion, you or an asset that you value will be harmed”. Prior empirical research
(Chin et al., 1992) as well as previous economic modeling research (Konrad & Skaperdas, 1998, p. 461) illustrate how such utterances
place assets within contingent threats in the attempt to convince the target that the threat is credible. In the analysis that follows, we
consider the different systems of visibility that are enlisted to see assets, the social actors that participate, and the ways that the proxies
about assets are implicated within contingent threats.
While the current study focuses on the practices directed at assets by street gangs, once again it is important to acknowledge the
broader context within which the extortion business operates, including the systems of governance and sovereign power used by
democratically elected governments that are imposed on territories. The systems of administration used by the state construct a lia
bility regime and a set of property rights, including what is legal, the ways that legality will be enforced, and the associated penalties
for illegal activities (Demsetz, 1972, p. 15). As mentioned previously, these systems of governance also underpin the financial
reporting activities of businesses and the tax collection system. Within Southern contexts, Hernando De Soto (2001) notes that such
5
systems of governance are important because they arrange the conduct of conduct, including not only the incentives to participate in
both formal and informal business activities but also the incentives to pay taxes.
Besides defining property rights and influencing accounting and tax definitions of revenues, expenses and assets, governance
activities also distribute and ration government services (Graham, 2010; cf. Preston et al., 1997), thereby framing the quotidian ac
tivities of daily life. The availability of schooling, healthcare, and other social programs depend on the amount of tax revenues
collected, from whom tax is collected, and in which communities it is spent (cf. Adato et al., 2016). As previous research indicates, it is
through these policy decisions that bio-power is enacted, and the population is stratified (Alawattage et al., 2019). These policy de
cisions are germane to the current study in that they frame and impact on the attractiveness and consequences of the extortion
business.
While governance activities set the frame for what happens within the communities that we study, the democratically elected
Salvadoran government also uses the police, army, and allied paramilitaries on the people and things within gang-controlled territories
(Morales & Rosales, 2016; Walsh et al., 2018). Ostensibly the use of sovereign power is intended to police the street gangs, but the
reality is that there is often collateral damage, including the family of street gang members as well as youth who may, or may not,
belong to a gang (cf. Valencia et al., 2015a, 2015b). Although the use of sovereign power may be ‘necessary’ to stop extortion, it
doesn’t address the reasons why extortion occurs in the first place. We return to this issue in the discussion section.
3. The Northern Triangle
The Northern Triangle, as it has come to be called, consists of the three Central American countries of El Salvador, Guatemala, and
Honduras. This territory is unique because of its proximity to the United States, a proximity that has influenced both the past and the
present (Dudley & Lohmuller, 2015; ten Velde, 2012, p.5). During the 1960–1990 period, the Northern Triangle was the site of several
civil wars as leftist rebels attempted to challenge the highly unequal distribution of wealth within society and overthrow the existing
governments. In the attempt to protect American business interests while also stopping the possible spread of communism, the United
States actively supported the existing governments. The signing of the peace accords during the late 1980s and early 1990s ended the
military conflicts but did not remove the weapons from the territory. Arguably, it also left behind a culture of violence that has
continued into the present (cf. ten Velde, 2012, p. 3).
Since at least the time of the civil wars, the Northern Triangle has been a conduit for drugs and people, thereby connecting the
South to the United States. The flow of South American drugs through the Triangle creates not only business opportunities but also
conflicts between warring drug cartels (ten Velde, 2012, p.6). Of equal importance, the Triangle is a major source of illegal migrants to
the United States as youth seek better economic opportunities and an escape from violence (Menjívar and Abrego, 2012). Some of these
same youth who made it to the United States during the civil wars years and became involved with gang activities in Los Angeles and
other major cities were subsequently deported back to the Triangle, bringing with them their American gang experiences and practices.
Within El Salvador and the rest of the Northern Triangle, the taxation activities of governments have always been minimalist (Di
John, 2008; cf. Lustig, 2012). Tax collection rates are among the lowest in the world, both because of low taxation rates and because of
minimal success in collecting taxes (Robayo-Abril & Barroso, 2022, p. 34; Tanzi, 2000). For example, the most recent OECD statistics
indicate that the average tax to GDP rate for El Salvador was 21.9 % compared to the OECD average of 33.5 % in 2020 (OECD et al.,
2022, p. 33). Furthermore, almost fifty percent of El Salvadoran tax revenues came from regressive value-added taxes (OECD et al.,
2022, p. 55) compared to OECD countries where 32.6 % of tax revenues come from value-added-taxes and where more progressive
forms of taxation such as personal and corporate income taxes and property taxes are more prevalent (OECD et al., 2022, p. 55, 180). In
El Salvador, property taxes, account for less than 1 % of total tax revenues compared to an OECD average rate of 5.5 % (OECD et al.,
2022, p. 180) and municipalities have limited other taxation capacities (OECD et al., 2022, p. 61).3 Finally, the collected tax revenues
are “weakly targeted” (Robayo-Abril & Barroso, 2022, p. 27) and are not spent on infrastructure and direct transfers that benefit the
poorest segments of the population. It is this combination of regressive forms of taxation and weakly targeted redistributions that leads
the World Bank to conclude that “the design of fiscal policy in El Salvador increases poverty” and that “the combination of taxes and social
spending increased the poverty rate” (Robayo-Abril & Barroso, 2022, p. 33, emphasis in original). Based on this evidence, we suggest
that neither the central El Salvadorean government nor revenue-constrained municipalities can adequately address social needs within
the different communities.
In this void, organized crime has proliferated. Mara Salvatrucha (MS13) and Barrio 18 are two of the gangs vying to control
territories and charge rents (Miguel Cruz, 2010). Estimates suggest that there are more than 50,000 gang members and an extended
social network of more than 500,000 people (Calderón, 2015). The gangs are willing to use violence against the other gangs, the
inhabitants and even the government, to accomplish their objectives. Northern Triangle countries have some of the highest per capita
murder rates in the world (UNODC, 2022a, 2022b). The gangs are willing to kill police officers who attempt to maintain public safety
in the disputed territories, killing them both on the job and tracking them to their home communities prior to assassinating them
(Marroquín, 2015; Santos, 2015). They are also willing to undertake mass killings such as burning a bus full of passengers as a way of
putting pressure on the government (Martínez, 2013). Finally, people who attempt to evade paying rent are used as examples, being
killed in very visible ways (Barrera & Chávez. 2016; Diario1.com, 2016). This is the context of the current study.
3
Our use of OECD countries as a comparison group is what the World Bank refers to as an “aspirational comparison”. The taxation and redis
tribution systems of OECD countries are not always progressive and arguably not equitable enough. This said, on an aggregate statistical level, they
are better than Northern Triangle countries such as El Salvador.
6
4. Method
Conducting research on the extortion activities of street gangs poses challenges (cf. Kelly et al., 2000, p. 65). First, the participants
in the extortion transaction are those who have the most knowledge of the micro details—including the calculations of value—but
these participants have little incentive to talk. The motto on the street for extortion participants and observers is ver, oir, callar (see,
hear, shut up). Indeed, it is the fact that the pandillas have succeeded in making an asset fragile that encourages individuals and
businesses to not only “pay the rent” but also to remain quiet about it. Second, it is the business of extortion itself that directly
contributes to the level and culture of violence within the Northern Triangle. The geographic areas where extortion occurs are the areas
controlled by the pandilla, and it is in these areas where the pandillas fight amongst themselves and with the police, army, and
paramilitaries for territorial control. And it is within these areas that the level of violence is the highest. These contextual factors make
it more difficult to undertake research within these physical spaces.
To study how extortion functions in this setting, we used a modified fieldwork encounters approach. Popularized by anthropol
ogists such as Taussig (2005, 2011, 2012), sociologists such as Venkatesh (1997, 2002) and Goffman (2009, 2015), and accounting
researchers like Bryer (2011, 2014) and Martinez (Martinez & Cooper, 2017), this approach emphasizes longer-term forms of
participation within the field of interest. Taussig, for example, used a fieldwork encounters approach to study paramilitary and death
squad activity in Colombia during the recently concluded civil war (Taussig, 2005); Venkatesh and Goffman studied street gang ac
tivity in the United States; and Bryer studied worker cooperatives in Argentina. A fieldwork encounters approach usually involves a
combination of participant observation as well as partially structured formal and informal research encounters.
This program of research started in 2005.4 We were in Central America conducting interviews for a research project on government
tax reform as well as for a project on maquiladoras operating in the fast fashion business. The taxation reform project directed our
attention to the ways that accounting information systems and taxation practices helped to arrange economic activity, and how these
arrangements were not convenient for all but rather disproportionately impacted on poor communities. The maquiladora project led to
us getting involved with a women’s cooperative that was producing fairly traded t-shirts. Our involvement with this sewing coop
erative took us downward to the level of ‘the street’ and to the precarity of life within the poor communities where the women and their
families lived. It also encouraged us to explicitly consider the centrality of assets within the extortion business, and the role of sov
ereign power as practiced by the street gangs and the state within poor communities.
During the early days of this study, we gathered archival materials on the extortion economy, and we leveraged our existing
contacts from the taxation project to talk with a variety of government officials along with staff from the World Bank, USAID, Banco
Interamericano de Desarrollo, and the UN Development Program. We also talked with anyone and every-one that might have a
perspective on what was happening. Included in this group were business owners, commercial lawyers, criminal lawyers who worked
defending and prosecuting criminal organizations, municipal leaders, people involved in the “security” business, and citizens who
lived in areas controlled by the pandillas. These conversations were followed by longer-term participant observations in a gang-
controlled territory near Apopa where the cooperative members lived, then in a different gang-controlled community near down
town San Salvador where the cooperative worked. Finally, we conducted a series of formal interviews with business owners who had
been targets of extortion; investigative journalists who specialize in street gangs and who have conducted hundreds of interviews with
street gang members and their victims5; and with a smaller group of ex-prisoners who may, or may not have, been street gang
members.6 In total, we talked with and/or interviewed more than one hundred knowledgeable participants and periodically visited the
two gang-controlled territories for approximately ten years. Our connections with these communities stopped in 2015 as we
increasingly became concerned for our physical safety.7
Like other researchers working in the fieldwork encounter tradition, we kept a research diary in which we recorded a combination
of descriptive, interpretive, and theoretical materials. This active working out of what we heard and what we thought it meant was a
daily practice that informed both our understandings and our subsequent fieldwork encounters. We also checked our interpretations
with the investigative journalists who specialize in the topic.
The analysis that follows is organized into thematic sections. Each thematic section foregrounds and analyzes different aspects of
asset-related street gang extortion practices. The analysis first attempts to map out the different asset-related practices, then to sub
sequently examine these practices. Next, the analysis considers the perspectives of both extortion targets and the people involved with
the street gang. Finally, we try to move to a more macro level, to draw attention to the ways that the activities of the Salvadoran central
government help to construct the frame and context within which extortion is practiced and must be understood. Our analysis and our
4
The narrative and analysis that follows alternates between using a ‘we’ and an ‘I’ point of view. The research process was a collaborative one that
involved the author of this study as well as two research colleagues: one colleague who participated in research interviews/fieldwork and one
colleague who was an investigative reporter. At the same time, there was a single author that wrote this particular manuscript and who added some
personal observations. For these reasons, the manuscript moves between a communal and personal point of view.
5
The El Faro group of investigative reporters have published a series of excellent articles on the pandillas (cf. Lemus, 2015, 2016; Martínez &
Arauz, 2015; Martínez & Sanz, 2011a, 2011b, 2011c; Sanz & Martínez, 2011; Valencia, 2010; Valencia Caravantes, 2015a, 2015b). These articles as
well as our conversations were an invaluable resource.
6
This later group consisted of ex-prisoners. We are not sure whether they ever formally belonged to a street gang since, for their and our safety,
we did not want to ask this question.
7
The data overlaps with the data used in Neu (2019). The primary difference is that the current study foregrounds our participant observation
data and includes interviews that were conducted after 2017.
7
field work in Apopa and San Salvador, like prior case study research (cf. Bryer, 2014; Martinez & Cooper, 2017), aggregates the
disparate understandings of different participants to tell a somewhat coherent narrative about the field (i.e., extortion with El Sal
vador) that we study. This mode of exposition smooths over differences within the extortion practices of different pandilla groups as
well as differences in the extortion experiences of extortion targets. In the analysis that follows, we attempt to strike a balance between
providing rich description (via quotes) and providing a theoretically informed analysis.
5. Controlling a territory
It was Spring 2007 when I received a phone call from Claudia saying that she had been out walking in the community going to buy a bag
of ‘green mangos’ from a street vendor when there was a ‘tiroteo’ (shoot-out) near the central square where the buses stopped. She didn’t
see if anybody was killed because she was too busy running to get out of there.
It was the morning of March 15, 2015, and various people were eating their breakfast in the diner. One of the clients noticed a white car
pull up in front of the business and saw three gang members disembark and enter. They approached the owners and started to discuss
something. Apparently, they didn’t like his tone of voice and they immediately took out their guns. There was no more talking before they
filled the owner with more than ten bullets and left him lying on the ground. With what little force he had left, he dragged himself across
the floor towards the washroom and the gang members fled (Andrade September 22, 2017).
In the introduction to Discipline and Punish, Foucault describes in careful detail how “On 2 March 1757 Damiens the regicide was
condemned to ‘make the amende honorable’”. This also demonstrates how his punishment was an elaborate public spectacle. Foucault’s
thick description of vivisection was used to develop his argument regarding a shift from modalities of sovereign power involving public
spectacles and directed at the body, to modalities centered on political technologies of the body and based on “knowledge, techniques,
[and] scientific discourses” (Foucault, 1977, p. 23). As the above quotations illustrate, the public shootings, assassinations and bodies
left by the roadside are still quite common within El Salvador. We propose that such public displays of sovereign power—by the police
and paramilitaries as well as by street gangs—are integral to administering contested territories.
Within urban spaces like downtown San Salvador and less urban spaces like Apopa, the administration of a territory by the pandilla
enlists different social actors with specific roles. For example, the “post” is someone who pretends to be a street vender and who
watches the entrance to the neighborhood. Their job is to see and hear what is going in and out of the territory and to inform other
members about any threats such as police or rival pandillas. In contrast to the stationary “posts”, “antennas” walk and search the
barrio, whereas “collectors” periodically gather the rent from local vendors. The “palabrero” is boss and “governor of this piece of the
capital” (Martínez, 2015). “Sicarios” are members entrusted with undertaking difficult or disagreeable assassinations and the
“homeboys” or “muscle” do whatever else is needed.
The informal yet organized and routinized nature of surveillance processes are evident in the following explanation provided by a
pandilla member as to what happens when an unknown and potentially threatening person enters their territory:
Question: What happens if I walk into the territory from another area, walk several blocks and then enter a bar and order a beer?
Answer: A group of members will enter the bar and they will take you to the bathroom and interrogate you (Martínez, 2015).
A newspaper story provides another example and adds additional details about such interrogations:
“… the victim recounted that he was selling small items on the street in the central market when a number of people with the
appearance of pandilleros started to follow him. This continued for a while until they grabbed him and indicated that they were
going to ‘introduce him to the force’, in the local slang… they questioned him as to where he lived, what was he doing on the
streets, and whether he was a police agent… the pandilleros decided that he wasn’t telling the truth so they started to beat him
with a board… when the victim continued to insist he was just a vender the threats of death increased and the pandilleros then
pulled out knives as well as an icepick to continue the interrogation” (Serrano, 2015).
In our case, I cannot remember the exact details of how we entered Apopa for the first time, but I remember that we were driving
and that we had one of the mothers from the community with us since we didn’t know exactly where we were going. During this initial
trip, we visited several of the mothers in their houses, met their children and walked to a nearby ice cream shop as a group to have an
ice cream. I remember some of the people on the street, including young males, looking at us strangely as we walked, but I assumed that
this was because it was obvious that we were not from there. In hindsight, and after I knew more about the pervasive presence of
pandillas within the community, I assumed that the presence of the pandilla was a “public secret” that wasn’t shared with outsiders
unless they explicitly asked (cf. Taussig, 2005, p. 33). Furthermore, since I didn’t know what I was supposed to be looking for, I didn’t
see the signs of the street gang’s surveillance activities.
Our initial experience of entering the community aside, and perhaps my failure to ‘see’ the surveillance, the above quotes draw
attention to the way that surveillance of a territory and the potential use of sovereign power against inhabitants is the basis for
administering the territory, including the collection of extortion monies. The quotes also illustrate how a physical securitization
assemblage and the use of force by this assemblage, can be an integral part of administration. This observation is important because it
suggests that, at least within this setting, the exercise of sovereign power is almost always implicated in the activities of governing the
conduct of conduct.
The first type of rent—poll rents—flow quite easily from routine visual surveillance (cf. Sabates-Wheeler & Verwimp, 2014, p.
1482). Pandilla members are aware of every single fixed and mobile street vender that works in their territory. They also know whether
these street venders live in an area that is controlled by their pandilla or the rival pandilla. This information influences whether they
8
allow the street vender to sell in their area, whether they charge an additional rent, or whether something worse happens to the vender.
As the preceding quotes hint at, street venders are quite aware of the perils of being caught between different pandillas and usually
choose, if they can, to align their living and selling arrangements.
Poll rents tend to distinguish between the type of assets used: that is whether the vender has a mobile cart, a rented stall in the local
market or a more permanent business establishment. For street venders (i.e., those that are mobile or have a stall) within a particular
geographical area, poll rents are charged on a daily or weekly basis. There is also an informal rule that individual gang members are not
supposed to charge an extortion amount above and beyond the base rent. A street vender states: “If a pandillero comes and requests
money, I have the right to tell the ‘palabrero’ that a member is asking for money. They then go to this member and give him la ‘verga’
(slang for a beating) (Martínez, 2015). As one street vender comments: “Here, I pay the pandilla with a gesture of gratitude because
they are not as bad as they could be. Or better said, I pay with gratitude because they don’t use their control more despotically…
because there are others who are worse than them.” (Martínez, 2015).
Poll rents are a simple rent in terms of how potential payees are identified, the mode of calculating the rent amount, and the method
by which assets are made fragile. Pandillas do not tend to threaten to ruin or steal the merchandise of street venders for non-payment.
Instead, they threaten to kill the vender. As the quote at the beginning of this section highlights, the killing of street vendors is a highly
visible act—an act that demonstrates the exercise of sovereign power for the audience of other street vendors selling in the same area,
as well as anyone outside of the immediate area who reads the newspaper or watches the news on television. While these acts of
sovereign power lack the pomp and ceremony of the vivisection of Damien that Foucault describes at the beginning of Discipline and
Punish, the daily killing of street vendors, bus drivers, and innocent bystanders is, by definition, quotidian. Much like the paramilitary
killings described by Taussig (2005) in Diary of a Limpieza, it is the frequency, senselessness and, hence, banality of these events that
demonstrate the power that pandillas have over the people and things in their territory. And, at the same time, the ‘tiroteo’ that Claudia
witnessed—and that we later learned involved a dispute between two rival gangs—illustrates how quotidian violence, whether it is
directed at shop owners or rival gangs or the police, becomes something normal. The pervasiveness and normalcy of the exercise of
sovereign power, as Taussig documents, becomes something that people plan for within their daily routines. In our case, we somewhat
obliviously continued to walk around the community but tried to stay away from the public bus stop. In retrospect, we also realized
that the cooperative members tried to buffer us from the violence, without us ever realizing it, by having one of the members
accompany us whenever we went somewhere to make sure we didn’t get ‘lost’.
6. Entry rents
Entry rents also flow directly out of routine administration activities and distinguish among the types of assets entering the territory
(Brown et al. 2021).8 Gang members stop unknown private and commercial vehicles entering the territory, setting in motion a series of
potentially different interactions. For private vehicles, the “post” makes a rapid assessment of the vehicle’s occupants—whether they
are young males or not—then asks some simple questions about where the occupants are going and why. Drivers of private vehicles
who do not fall into the ‘risky’ category—i.e., they are not young males—and who are well versed in the tacit rules will roll down the
window, take some coins or small bills from a visible place within the car, and give it to the ‘post’ all the while trying not to make too
much eye contact and without engaging in any conversation (I-73). For these individuals, a successful rent transaction is one where the
offered payment is accepted without any subsequent interaction or violence.
The process for commercial vehicles is different. When a commercial vehicle approaches the territory, the ‘post’ visually examines
the vehicle to determine if the vehicle’s owner is already paying rent or whether it is a first-time entrant to the territory. For new
vehicles, the ‘post’ motions for the vehicle to stop and the negotiation process begins. In many cases, the ‘post’ does not negotiate
directly but rather dials a number on his cellphone and passes the phone to the driver. The driver will then either negotiate directly or
give a cellphone number to the ‘post’ to have his negotiator call the company’s negotiator to make a deal (cf. C. Martínez, 2015a).
These negotiations enlist proxies for asset values in the attempt to distinguish among different entrants. When the negotiator for the
pandilla is on the cellphone, anecdotal evidence suggests that the negotiator has an implicit list of entry charges depending on the type
of vehicle and the value of goods being carried (I-1). In cases where the ‘post’ is responsible for negotiating, he may try to distinguish
among entrants by estimating the value of the cargo, asking the driver how many stops they are making in the territory. In other cases,
the ‘post’ will use even simpler proxies such as the size and the newness of the truck. The commonality among these methods is that the
rent amount is contingent on entering the territory and the calculated value of a business asset (i.e., either the merchandise or the
delivery truck). In the absence of other perhaps more precise information, these proxies for asset value are used to calculate the rent.
Like the poll rents discussed in the preceding section, the collection of entry rents can be viewed as an integral part of routine
administration activities (I-3). First, they are routine in that the process of charging entry rents is initiated whenever a new commercial
vehicle enters the territory and attempts to make a delivery (Brown et al. 2021, p. 10).9 Second, routines are used to calculate the entry
rent amount. Finally, the gang members involved in the entry rent process—at least the on-the-street ‘post’—are responsible for other
tasks besides collecting entry rents. These observations about entry rents are intended to draw attention to the ways that re-occurring
8
Using “extortion payment data and sales data for all goods delivered by a leading wholesaledistributor in El Salvador for the period 2012 to
2019′′ ”, Brown and colleagues (2021) provide an excellent analysis of the economic aspects of the extortion business in El Salvador. Their analysis
shows the prevalence of entry rents and the market consequences of these rents.
9
Brown et al. suggest that street gangs attempt to distinguish between delivery vehicles that are stopping in the territory (i.e., those subject to
entry rents) and those simply passing through the territory (p. 10).
9
extortion activities are organized and routinized.

Not surprisingly, the owners of commercial vehicles that need to enter gang-controlled territories try to minimize the amount of
rent paid. One interview participant told us that he consciously decided to maintain an old fleet of trucks even though they are more
expensive to maintain and repair (I-1). This strategy attempts to manage what is visible—i.e., the appearance of the delivery truck—to
decrease the entry rent. Another utilized a dedicated negotiator within the company’s head office who would negotiate by phone
whenever one of the delivery trucks was stopped by a street gang, the purpose being to negotiate the rent downward as well as to
remove the ability of individual drivers to overstate the amount being demanded, and hence to pocket the difference. Finally, in the
case of the sewing cooperative, some venders simply refused to enter the community whereas others such as the trucking company
responsible for shipping the final product charged a ‘security fee’ for entering and for paying for extra guards during the loading phase.
These business impediments and other considerations eventually encouraged the cooperative to move to downtown San Salvador.
Business owners were acutely aware that there was a risk to not paying. One interview participant, an owner of a small public bus
transportation company, told us that one of his drivers was killed several years ago and that never again did he want this to happen.
This bus owner as well as other bus owners that we spoke with were able to tell us, unprompted, how many bus drivers and taxi drivers
had been killed in the previous year (I-136). While these business owners tried to reduce the amount of entry rents paid and the risks to
their employees, they were resigned to paying entry rents because, “buses [and taxis] are like a child, indefensible.” (Martínez, 2015b).
7. Activity rents
The idea that knowing the people and things within a territory is necessary for extortion is a central theme of the current study. The
previously discussed poll rents and entry rents depend on this knowledge but do not move beyond the value of an individual asset and
do not attempt to assess the revenue and income streams that individual assets help to generate. When we asked the investigative
reporters whom we interviewed whether the pandillas do move beyond the asset in their extortion activities, they answered “yes but
not that frequently”. They commented that street gangs sometimes use activity proxies when dealing with businesses that have a fixed
retail location.
Our conversations with business owners and with the investigative reporters suggest that visual observation data provides the
starting point for constructing rudimentary activity proxies. Information, such as how many clients enter the locale, who these clients
are, and what raw materials are being brought into the business—functions as proxies for both the value of certain assets and the
financial performance of the business. While gang members did not talk or use activity proxies, as a formally trained accountant would
(cf. Neu, 2019), they did have an intuitive understanding of the roles of assets in generating revenues and profits.
Activity proxies allowed the street gang to attempt to shape and frame the reality of the extortion targets (cf. Vollmer, 2007, p. 586)
during the negotiation of the extortion amount. However, the imprecision of the proxies, and perhaps the fact that these proxies were
based on visual observations rather than the reproductively sourced accounting numbers contained in financial statement, left spaces
for the extortion target to challenge the meaning of the proxies and to provide alternative proxies regarding the profitability of the
business (cf. Vollmer, 2007, p. 587).
Interactions around proxies tended to take a certain form.10 The pandilla would tell the business owner that they have the business
“well watched” and that they know how many daily customers the business has and, even, the names of some of the customers (I-137).
The business owner in turn would respond that the proxy isn’t a good proxy, that they don’t sell enough, and their costs are too high to
allow them to pay that much rent. This game of negotiation and bluffing around activity proxies continued until some agreement was
reached.
The business owners were not the only ones bluffing, however. Numerous interview participants told us that the pandilla would aim
high with its initial extortion demand in the attempt to get the business owner to reveal information (I-5). This bluffing strategy places
the burden of proof on the business owner and is aimed at getting the owner to voluntarily share revenue and expense information, or
to enlist activity and other proxies in an attempt to convince the pandilla that the rent increase is not sustainable. Several of our
interview participants told us that they were wise to these games, and, for this reason, they would first offer their counter story as a way
of setting up a counteroffer—an offer which was usually less than half of the demanded amount.
8. Income proxies
Living in pandilla-controlled territories poses special challenges. Visual observation is intensified by the fact that pandilleros are
part of the community; having grown up there, they and their families are one’s neighbors. In this sense, pandilleros are part of the
gossip, rumors, and daily activity of the territory. This proximity provides the pandillas with a variety of potential proxies about the
wealth and income of the territory’s inhabitants, including information about remittances that families receive from family members
working abroad.
Remittances are often a key source of income for families. Yet, since both the receipt of the remittance and what the monies are
spent on are visible, the recipient becomes a target. In smaller communities like the community where the sewing cooperative was
located, there might only be one or two stores that handle electronic remittances, making it easy for the pandillas to keep these lo
cations under surveillance. Signs of conspicuous consumption such as a new large screen television, or changes in consumption
10
Ponce (2021, p. 152) documents the different ways that street gangs approached their targets and the different forms of payment that were
demanded.
10
patterns, signal to the pandillas that someone is receiving remittances. In these cases, it is not personal wealth that is being extorted but
rather the continuing income stream made visible by one’s consumption activities. Stated differently, these consumption activities
provide a proxy for the existence of a stream of remittance income that can be extorted.
While the use of proxies for the existence of an income stream was most common, we also came across cases where inside in
formation about an income stream was used. For example, shipping companies and cruise ships hire Salvadorans, signing them to six-
month contracts. These staff members are flown to distant ports and then flown back when their tour of duty is over. The periodic
disappearance and reappearance of the sailors does not go unnoticed in the community, nor does the fact that their families continue to
live in the community, that they periodically go to a local store to receive their remittance, and that they sometimes buy visible items
like electronics equipment.
One sailor recollects:
It was in 2011 that they knocked on my door for the first time. It was a teenager who simply stated that the gang wanted their
part. He pronounced the name of the palabrero for the zone as if this was enough to make one pay. He then stated that the gang
knew his salary, his type of work, and the name of the ship on which he worked (Martínez, 2015c).
In thinking through what had happened, the sailor noted that shipping and cruise ships tend to pay mostly standardized salaries
based on the type of work and seniority. It was this knowledge that made it possible for the pandilla to “establish a table of charges that
goes from $30 to $200 monthly depending on the salary of the sailor.” It was this income information that allowed the pandilla to
create an “income tax” table and to function as if the pandilla was a government taxation authority (I-9).
While the two preceding examples highlight how pandillas tax the income streams of individuals, it is important to note that not all
members of the community pay (income) tax and thus that income streams are differentially taxed. The cooperative, for example,
operated for about two years within their home community and was never asked to pay rent to the pandilla. Later, when the coop
erative moved to downtown San Salvador, the new location was, fortuitously, in an area controlled by the same street gang (although
administered by a different clique). By this time, we were more aware of the “pandilla problem” so it puzzled us as to why the street
gang didn’t try to charge rent. However, when we asked, the cooperative members simply shrugged their shoulders and didn’t respond.
In retrospect, we assume that it was because most of the women had sons or brothers or other relatives involved with the pandilla, but
we don’t know for sure. These observations highlight how extortion by the pandilla, like taxation by formal governments, is not
necessarily uniform across all inhabitants and thus is not necessarily convenient for all. Rather, the proceeds of extortion are shared
among a loose network of the family members of current gang members as well as the families of incarcerated gang members. The ways
that the street gang, qua stationary bandit, shares the collected monies is different from how democratically elected governments share
and distribute collected tax revenues. At the same time, the consequences are similar in that someone pays and somewhat benefits from
the process.
9. Asset-switching
The types of rents documented in the preceding sections are based on the value of individual business assets or the revenues/profits
that can be generated from the asset. While it is these assets that are ostensibly being taxed, pandillas often use asset-switching
strategies when negotiating to make extortion personal. While business assets have a replacement cost, family members do not.
Furthermore, introducing family members into the negotiation makes it much more difficult for business owners to cognitively think
through their ability to pay a certain extortion amount.
Sometimes asset-switching strategies were inadvertent, while at other times they were explicitly articulated. One store owner told
us how three pandilla members entered his store one afternoon and demanded to speak with the owner. In front of his employees, the
pandilla demanded a large sum of money and threatened to kill the employees one-by-one if he didn’t pay (I-137). To escape this initial
confrontation, he agreed to try to get the money together. When we asked him what he was thinking during this moment, he said that
he felt paralyzed. Not only were his employees being threatened but also his family, since two of his nephews worked in the business.
Although the asset switching strategy was unplanned—the pandilla did not know he had family members working in the business—the
strategy did motivate him to eventually pay something.
In other cases, asset switching was an explicit part of the negotiation. The following example, which is an amalgam version of the
stories that business owners told us, highlights how asset switching works:
Gang Member: The Gang needs a $500 monthly contribution from you.
Business Owner: [silence from the business owner]
Gang Member: We have you well watched. It is obvious that your business is making money
Business Owner: Not really, my number of customers is down, and costs are up
Gang Member: Your daughter has such a beautiful face and smile. How old is she?
Business Owner: [still silent]
Gang Member: The private school that she goes to costs $12,000 per year, right?
Business Owner: I can’t afford to pay extortion
11
Gang Member: [half laughter and half sneer] …You cannot afford to pay $500 monthly? [pulling his shirt aside to show his gun]
… I will make you an offer that you can’t refuse…11
This interchange illustrates how proxies for business activities and personal things are brought into the extortion negotiation, and
how the insertion of a family member into the negotiation changes the dynamic. The street gang member tells the business owner that
he is ‘watched’ and is ‘making money’ in order to justify the extortion amount. The owner, in turn, counters by saying that the number
of customers are down and costs are up—hopefully signaling to the gang member that it is the business owner that better knows how
much rent the business can afford to pay. The pandillero then switches assets, moving from a focus on the business locale to the
daughter of the owner, implying that what will be “at risk” will be family members. Furthermore, the pandillero references the cost of
tuition, implying that the tuition amount says something about the profitability of the business. Finally, the gang member uses a
popular phrasing from the movie The Godfather to perform the threat as to what happens when someone doesn’t pay. The above
example illustrates how doing more with asset proxies in such situations involves recognizing and exploiting the recognition that
business owners are unwilling to put family members at risk.12 Many of our interview participants told us that these asset-switching
strategies made it difficult to refuse to pay something. This was especially the case when what was being threatened was a family
member rather than an employee.
10. Collaborators
In contrast to government taxation which is imposed from afar by politicians and bureaucrats who are not from the community,
extortion is a community activity that is simultaneously against and for certain community members. As documented in previous
sections, intensive visual surveillance allows the pandillas to know and control territories. Such surveillance operates like a panopticon
in that community members do not know whether they are being watched or not. One of the investigative reporters that we spoke with
noted that his interview participants were noticeably jumpy whenever they met, since being seen with a reporter contravened the first
rule of the street: ver, oir, callar (see, hear, shut up). Furthermore, it was impossible to know who was watching, who would volunteer
information to the pandilla, and who would subsequently receive a portion of the rent proceeds.
Within the extortion business, collaborators play at least two important roles. First, collaborators inside the business provide
private information to the pandillas. These individuals have access to both information about the activity and income levels of the
business, as well as personal information about the owners. The case of the sailors mentioned in the previous section is one example of
this. The sailors in question worked for different shipping and/or cruise companies but they all belonged to the same union and were
recruited by the same maritime employment agency. The investigative reporter who covered the case indicated that the sailors that he
talked to suspected that it was someone within one of these two organizations who provided the employment information that allowed
the pandilla to precisely calculate the income levels of the individual sailors (I-1).
A slightly different case of collaboration occurred within a small taxi company (Martínez, 2015b). The company had 35 cars on the
road, with the company owner having five cars himself, with the remainder belonging to individual drivers. One day the owner
received a call asking for rent payments: “They knew the exact number of taxis, where he lived and where the office was… and
obviously the cellphone number.” When the owner decided to ignore these requests for money, the pandillas made an offer that he
couldn’t refuse. The ‘stick’ part of the offer was that they would kill some of the employees if he didn’t come to some sort of agreement.
The ‘carrot’ part of the offer was that each driver would pay a weekly extortion amount, but the owner himself wouldn’t have to pay for
the five company cars that were his. The owner recounts that “definitely this weekly payment would screw up the finances of the
individual drivers”—but he himself would remain free of problems: All he would have to do is look the other way. This individual was
not happy about having to betray the other drivers, but he tried to rationalize it by saying that it was one of these drivers that gave the
pandilla the information about the company in the first place.
The second important role played by collaborators is the gaining of access to government databases (cf. Choo & Grabosky, 2013).
Most cases that we came across involved the reactive use of information—that is, situations where something happens in the territory
and this event is then traced backward to the database. The first example of this involves the private security guards that ostensibly
work to protect bars and restaurants. When an “incident” happens, the security guards usually ask the involved participants for their
DUI (a government issued identification card). This DUI information is then immediately relayed to the palabrero since “the private
guards are with us” (Martínez, 2015). This information is then used to identify potential opportunities as well as threats (i.e., members
of rival gangs or police officers).
These same traces can be used to discourage people from complaining to the police since the pandilla knows where the target lives.
For example, several years after moving to downtown San Salvador, the administrator for the women’s cooperative had a fright when it
came time to ship the finished goods. The shipping company loading the boxes told the administrator that it was strange that he was
shipping so many “empty boxes” because the boxes had no weight. It was at this moment that he discovered that some of the members
had arranged for the robbery of a sizeable amount of finished goods inventory. The security logs indicated who had entered on the days
11
The first four dialogue lines were told to us by our interview participants. The dialogue lines about the beautiful face of the daughter are a
rephrasing of Flores & Fagoaga (2012) account of the extortion process as is the reference to the Godfather movie.
12
It is important to note that extortion targets resisted viewing family members as ‘assets’ upon which a value can be placed. In contrast, the street
gangs did not. Sviatschi (2022) also notes how children, qua gang members, “are considered valuable assets for the gangs since there they not likely
to be prosecuted in adult courts and thus able to return to the streets” (p. 11).
12
that the robbery occurred, and it seemed likely that the police would be able to make a case. Somewhat surprisingly, most of the
cooperative members, including the administrator, did not want to report the robbery to the police. The administrator was strongly
opposed to reporting it because he would have to be the one to make the police complaint and the complaint required that he fill in his
name and DUI number. Already, he had received anonymous hang-up phone calls that he interpreted as the pandilla letting him know
that they knew who he was. Furthermore, he knew that some of the women had family members in the pandilla. In the language of the
street, he did not want to bring “the force down upon himself”. Interestingly, while it was connections to the pandilla that initially
allowed the cooperative to be exempted from paying tax, these same connections now made it difficult to enlist the formal judicial
system. This example illustrated to us not only how the formal state securitization assemblages do not always penetrate deeply into
territories controlled by the pandilla but also the fluidity and temporality of individual-level arrangements with the pandillas.
11. Hidden assets
Much like government taxation, some businesspeople have the skills and economic resources to avoid extortion by hiding and/or
protecting their assets. On the personal front, business owners live in and move between secure spaces. They live in gated communities.
They send their children to private schools where they are picked up and dropped off. Later, children are sent to university in the
United States or Europe. Regular shopping activities take place in commercial centers with heavy security at the entrances and within
the center itself. And if people feel claustrophobic, Miami or Houston are only short flights away. These strategies minimize the
exposure to the capricious, quotidian violence that occurs in marginal communities. It doesn’t, however, eliminate the risks.
On the business front, corporate activity is structured in ways that minimize the archival traces that are contained in government
databases. Lawyers told us that corporations are often structured with ‘dummy’ directors and shareholders to maintain the anonymity
of the real owners. And because Northern Triangle countries have not been, until recently, signatories to international tax sharing
treaties, these same companies often incorporate an affiliated company within a tax haven jurisdiction, as this provides a series of tax
avoidance (and evasion) opportunities. These strategies make it more difficult for the pandillas to identify the owners of certain assets
as well as for the Salvadoran government to tax these assets.
Some types of businesses, however, are inherently more difficult to protect. On a continuum, businesses that sell to the public in a
non-secure space like a public market are the least secure; businesses that sell in commercial centers with security are in the middle;
and manufacturing businesses that are located in secure industrial parks (i.e., zona franca areas) are the most secure. This latter group
does not deal with the public and they are safely hidden within large industrial parks.
Being located in a secure physical space limits the pressure that can be placed on the business owner, but it does not mean that
someone will not end up paying. One of the investigative reporters that we spoke with said that someone always pays (I-14). For
example, owners of bus companies sometimes refuse to pay extortion monies, but it is their drivers that end up paying with their lives.
In other cases, it is the employees working in a fixed business establishment that pay when the owner refuses to pay. For example, the
pandillas may not be able to enter the heavily guarded industrial parks where large maquillas operate, but they can charge employees
as they enter and leave the industrial park since employees take public transit to and from work. These examples highlight how the
costs and risks of extortion are transferred downward to the workers. Although there may be difficult to access business assets such as a
factory located in a zona franca, business assets are still associated with extortion. However, other more vulnerable and less protected
assets, such as employees, are the ones that end up being extorted. While some assets are hidden and thus untouchable, somebody
always pays.
12. Fragile assets reconsidered
It is a bright sunny day in downtown San Salvador, and the room where the cooperative members are cutting the fabric for the t-
shirts is bathed in light. We are standing there watching Naomi cut, talking with her about production issues as well as about what is
happening in Apopa. We had seen something on the news about a recently announced government initiative to use the army to help the
police curtail pandilla activity within “red zone” communities. When we asked her about this Naomi responded: “Aye, things are not
what they seem… The police and others [the paramilitaries] come into our community and target our children… They are not there to
protect us. Our children are not the problem…” When we asked the other cooperative members about this, they expressed similar
sentiments. One of the women summed up the situation, stating: “Come election time, the politicians will flock to our community and
promise us that things will be different if we vote for them… And then after the election, nothing changes…” (see also Kan, 2014;
Pastor Gómez, 2020, p. 11).13 These comments hint at how the cooperative members understand their situation, including how
politicians attempt to manipulate them and how the police and paramilitaries are used to target them (cf. Walsh et al., 2018). These
relations of force are both quotidian and visible. Similar to the experiences of Taussig in rural Colombia, violence is the currency of
everyday life (2005, p. 41).
At the time of this conversation, I still didn’t really understand. On the one hand, the front-page stories in the newspaper and the
visual images on the television were showing me the seemingly senseless and brutal ways that sovereign power was being exercised by
the pandillas against people and things in the territories that they controlled. Additionally, in my daily conversations with people from
all walks of life, I could see and feel the frustration of ordinary people who were fed up with the pandillas and with living with constant
13
These types of reports suggest that the decision horizon of the Salvadoran government is influenced by the election cycle: both in terms of
appearing strong against the pandillas and garnering votes from marginal communities.
13
fear. I still remember an early morning drive to the airport and the taxi driver directly telling us how he was an ex-military member and
indirectly telling us how he and his friends were “doing something” about the pandilla problem.
If this was the only narrative that I was hearing, I would have been convinced that the pandillas were the primary problem. But
personal observations and conversations as well as stories in the press didn’t fit neatly into the narrative. For example, there were the
newspaper articles about extra-judicial killings by the police and paramilitaries within marginal communities (Gagne, 2016; Valencia
et al., 2015b). There were also stories about the democratically elected government using the legal system and the police to thwart any
attempt by third sector organizations and the pandillas themselves to provide meaningful work for current and ex-pandilleros
(20minutos.com, 2015). These attempts involved arresting and jailing non gang members, including community leaders and
former government ministers, who had attempted to negotiate a peace agreement between the pandillas and the government (Carlson,
2020). Ironically, these newspaper articles about the active attempts of the government to target and punish the street gangs and their
supporters ran alongside stories about pervasive corruption and high-level politicians and elites hiding their monies in offshore tax
havens to avoid paying tax. Not surprisingly, the comments we heard from Naomi and some of the other mothers as well as the counter-
factual snippets were unsettling and took a long time to process and understand.
While all this was happening, our involvement with the sewing cooperative was coming to an end. The robbery and our fear about
potentially being “subject to” the force of the pandilla resulted in us stopping to visit the community and eventually stopping to work
with the cooperative. We eventually lost touch with Naomi and with her children. We did hear, however, that her son Elias was one of
the “mero meros” [higher ups] in the pandilla. This news was incredibly hard to digest since I still remember him as a young boy who
appeared to have an openness to the world, who was attentive to his mother and younger sisters, and who had a smile that dissolved the
initial distance between us. When I heard the news about Elias, I kept wondering about how these fifteen years might have passed and
how he got to where he is today.
Our tentative answer to this question is that the people and things located in marginal communities like Apopa are subject to
multiple forms of governance and sovereign power in ways that more affluent Salvadorans are not. The minimalist and regressive
Salvadoran tax system is mostly invisible to the inhabitants of marginal communities, but it sets the frame for how daily life and
economic activity unfolds. As comparative country data previously provided illustrates, the Salvadoran central government simply
does not collect enough tax, and the tax that it does collect is highly regressive (Hanni et al., 2015; Robayo-Abril & Barroso, 2022, p.
34).14 Furthermore, municipal governments do not have sufficient taxation capacity to address the myriad of problems that they face
within their communities. This results in a central government that simply doesn’t have enough money to spend and redistribute.
Furthermore, the money that it does collect is first siphoned off via corruption (Robayo-Abril & Barroso, 2022, p. 37), and then spent
on more affluent communities. The only attention that red zone communities receive is visits by politicians prior to elections and then
the attention of the police and paramilitaries afterwards.
One of the consequences of the government’s activities is that the extortion business is, for many young males, the only possible
economic game in town.15 This observation does not deny that the capricious, quotidian violence by street gangs against business
owners, the community, rival gangs, and the police is abhorrent. Rather, it simply suggests that the extortion business and the violence
that accompanies it must be understood as a partial response to the types of arrangements and forms of sovereign power that people
and their assets within marginal communities are subject to. Assets and people within marginal communities are excessively fragile but
it is too simple to say that this is only because of the pandillas. Furthermore, as our interactions with members of the sewing coop
erative and their family members reminded us, pandilla members and their families are people also—people struggling to survive,
forced to conduct themselves as acting subjects within macro-level economic arrangements that are unfair and leave few other choices
(Martínez et al., 2016). In this regard, street gang members and their families, frontline police officers working in marginal com
munities, and small business owners are caught up in the same structures, each attempting to act as an acting subject in order to survive
and feed their families.
13. Discussion
This study examines how street gangs practice extortion in the territories that they control. More specifically, we consider the role
of assets within the extortion business in El Salvador, highlighting how proxies for the value of business and personal assets, and the
role of sovereign power in making assets fragile, are critically important. The analysis shows how the different ways of valuing assets
facilitates different types of extortion calculations as well as the games around asset values that both street gangs and their targets play.
Finally, the study proposes that the actions of the democratically elected Salvadoran government creates the conditions of possibility
for the extortion business. The extortion business—like state taxation—is not convenient for all in that it is the working poor that pays
the price of extortion.
The study contributes to our understanding of accounting—especially accounting in the South—in three specific ways. First, the
analysis foregrounds the roles that proxies for asset values play within extortion processes, including the way that different proxies
make possible different types of extortion calculations. Previous research on extortion has not examined these specific asset-related
14
Hanni et al. conclude that: “the results of this study suggest that one of the major challenges still facing the [Latin America] region is improving
the redistributive power of fiscal policy, in terms of both taxes and expenditure, in order to enhance equality in disposable income distribution and
further reduce poverty” (p. 25).
15
The 2022 El Salvador country-level summary by the World Bank states that “short term measures are urgently required to tackle current low
levels of employment among the poor and vulnerable” (Robayo-Abril & Barroso, 2022, p. 38).
14
processes but prior accounting research does acknowledge that games around assets can occur, including how numbers taken from
formal, written accounting records can be a site of contestation. The current study complements prior accounting research by showing
how being ‘inside’ and thus having access to proxies from formal accounting systems versus being ‘outside’ changes both the types of
proxies for asset values that can be used and the possible types of games that can be played. Furthermore, the analysis explicitly
foregrounds the importance of relations of force and sovereign power within such games. While the enlistment of contingent threats
involving sovereign power is arguably an extreme case—at least within North settings—the study shows how games around assets
often depend on enmeshing assets within relations of sovereign power. It is the ability of street gangs to “bring the force” down upon
assets and their owners that is a defining feature of the extortion business.
Second, the analysis challenges how we think about assets and accounting for assets. A key premise of the current study is that the
ability to exercise sovereign power allows street gangs and governments to define what counts as an asset and to involve these assets in
taxation activities. This vantage point emphasizes that the definition of assets is the consequence of power relations and, hence, that
assets are something more than what is enacted by governments and their accounting standard setters. Accounting standards define
what counts as an asset, how such assets will be measured and how they will be manipulated to arrive at a profit number. These same
standards also state that asset accounting occurs within a formal set of written accounting records and that, via the entity principle,
business is not personal. However, as Tinker (1980), Cooper and Sherer (1984) noted almost 50 years ago, these apparently neutral
definitions are inherently arbitrary and partisan. They are partisan in that someone invariably benefits, and someone is disadvantaged,
by the accounting rules that governments enact. These same standards bracket from considering the role of the state in setting the stage
upon which different social groups will participate in economic activities, how they can use their assets to earn a living, which assets
will be put at risk within these economic games, and how different types of resources (including sovereign power) can be enlisted.
The current study steps outside of a narrow definition of assets (and asset accounting) to consider how street gangs involve assets in
their extortion activities. Like government forms of taxation, the amount of extortion charged is contingent on the presumed value and
characteristics of assets, including who owns the assets. The study also steps outside of a narrow framing of assets to consider how
business owners think about whether they should pay the extortion amount. These forms of accounting for assets are different than the
calculations that occur within the accounting department of large public companies, but they are no less thoughtful and no less
important. Indeed, for a business owner in the South, thinking about assets can have life and death implications.
This vantage point raises uncomfortable questions about accounting for assets. On the one hand, we, qua accounting academics,
know that standard-setter enacted definitions of accounting assets are partial in that some items of value to the business are not
capitalized as an asset: for example, the value of employees and their intellectual capital. On the other hand, many of us are un
comfortable with stepping outside of standard-setter definitions and with violating the entity principle by viewing family members,
especially children, as assets since this implies that they are commodities that we can calculate about and place a value on. This said,
this is exactly what small business owners in El Salvador and elsewhere in the Northern Triangle are forced to do. Business owners
would much rather maintain the fiction upon which the entity principle is based—that business is not personal and that persons (e.g.,
employees and family members) are not at risk. Unfortunately, the pervasiveness of the extortion economy forces these individuals to
think about the value of a life and how their decision to pay or not pay potentially has life and death consequences. As a person (and
accounting researcher), it is painful to hear these stories and to contemplate what we would do in such situations. People should simply
not have to calculate about people in this fashion. Unfortunately, in the South, these are the calculations that business owners must
make.
Third, the study challenges us to be theoretically thoughtful and to question the starting presumptions of the theoretical frames that
we draw upon. Foucauldian-inspired accounting research, for example, has foregrounded how accounting technologies, qua visibility
machines, participate in subjectivation processes. At the same time, governmentality researchers often accept that there has been a
temporal movement from sovereign power to governmentality thereby reifying what is a historically contingent process. Furthermore,
Foucault’s assertion that processes of government are convenient for all should not be taken as a universal statement of fact but rather
as something that must be empirically interrogated. The current study shows how people as well as their assets are enmeshed in
multiple power relationships, including relationships of sovereign power. The study also highlights how proxies for assets and their
value play an important role within extortion processes. These observations do not negate the usefulness of viewing accounting in
scriptions from formal accounting systems as technologies of government: rather, it encourages us to reflect on what constitutes a
proxy as well as how proxies for assets can operate as a technology of sovereign power.
To help us think through how a territory comes to be dominated as well as how modes of governance and modes of sovereign power
co-exist, we enlisted Olson’s notion of stationary bandits. The literature on stationary bandits encourages us to think more carefully
about the direct and indirect forms of sovereign power as well as whether ‘organized theft’ by street gangs is appreciably different than
the taxation activities of democratically elected governments. For example, both groups use varying amounts and forms of sovereign
power in the attempt to dominate territories, both use proxies to determine the value of assets and to calculate the monies that people
within the territory are required to pay, and both re-distribute a portion of the collected monies to select groups of people. Obviously,
this simplistic comparison is simplistic for multiple reasons. At the same time, the comparison forces us to consider how territories are
dominated and how people and their assets are subject to sovereign and other forms of power.
The provided analysis is a tentative first step in understanding the fragility of assets within South settings like El Salvador. This said,
more research is needed to understand how street gangs and democratically elected governments target assets as well as how people
try to hide and protect their assets. In the pre case analysis sections of the study, we included statistics on the tax collection practices of
the Salvadoran central government and suggested that the amount of tax collected, and the regressive nature of taxes, made it
impossible for the government to provide adequate social services. We also mentioned a series of studies that documented the gov
ernments potential involvement in extra-judicial killings in marginal communities. Based on this evidence, we noted, but did not study,
15
the explicit role of the Salvadoran state in setting the frame for the extortion activities of street gangs. Clearly, more research is needed
on the role of democratically elected governments in both setting the frame via the use of indirect forms of sovereign power and
actively intervening in marginal communities through the enlistment of direct sovereign power. These sorts of analyses will help us to
better understand how people and their assets are subject to both street gangs and the state. After all, assets are mostly things—what
Marx refers to as dead labor—whereas people are living. For this reason, it is important to understand how these multiple relationships
of power impact on people living in these communities as well as on the things that they value.
Declaration of Competing Interest
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to
influence the work reported in this paper.
Acknowledgments
The funding provided by SSHRC is gratefully acknowledged. This research would not have been possible without the collaboration
of Claudia Quintanilla, Efren Lemus, Daniel Martinez and everyone else from El Salvador who did their best to help me understand.
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Critical Perspectives on Accounting 95 (2023) 102506

Contents lists available at ScienceDirect

Critical Perspectives on Accounting

Full length Article

Fragile assets: Street gangs and the extortion business

E-mail address: dneu@yorku.ca.

2. Assets and proxies

3. The Northern Triangle

extortion activities are organized and routinized.

11. Hidden assets

12. Fragile assets reconsidered

Declaration of Competing Interest

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