Against the Odds: Small Business Strategies for Managing Extortion in San Salvador

Abstract

Since the mid-2000s, extortion has impacted social and economic development in El Salvador significantly. Against the grain of the extant literature, which predominantly takes for granted that extorted businesses are passive victims, we leverage business surveys and 103 interviews, primarily with 54 micro and small enterprises (MSEs) in the San Salvador metropolitan area, El Salvador, to explore (a) the impact of extortion and (b) how businesses operate in the face of extortion. We conducted some interviews before and others during the state of exception in force since March 2022, garnering unique insight into both impacts and business strategies. By way of statistical analyses, we elucidate the differential impact of extortion on Salvadoran MSEs, showing that the very smallest businesses suffer a disproportionately heavy burden. Drawing upon extensive fieldwork, we find that MSEs (a) act strategically in the face of extortion, (b) adopt a diversity of strategies to manage extortion on a continuum from avoidance to adaptation, negotiation, and resistance, and (c) have different ranges of strategies available to them, largely varying according to the businesses' mix of tangible and intangible resources, which MSEs leverage to manage extortion and ameliorate its impact. 80 Bergmann et al.