Pandemic Micropolitics in Latin America: Small Business and the Governance of Crisis From Above and Below in El Salvador

Abstract

The COVID-19 pandemic had severe impacts in Latin America, with small businesses intensely affected. Beyond its economic consequences, the pandemic also exacerbated structural flaws in some of the region's weakly institutionalised democracies, diminishing State legitimacy and expanding that of organised criminal groups. In considering how State governance from above is challenged by non-state governance from below, this article examines a “pandemic micropolitics” as seen through the lens of support to the small business sector. We outline a framework to understand co-governance in hybrid political orders during crises; and examine this using case studies of urban informal markets and the transport sector in El Salvador. In showing that the pandemic contributed to a renegotiation of co-governance between the State, criminal organisations, and business associations, we contribute to understandings of the dynamics of distributive politics and the co-governance of crisis; and the potential implications for a post-COVID-19 political economy in Latin America.

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

“…The more the state is absent or deficient in the provision of public goods, the more communities are susceptible to becoming dependent on and supporters of criminal entities (Felbab-Brown 2010). Yet, the practice of extortion also shapes and expands such hybridity, making criminal organizations governance actors (Arias 2017;Bull & Hoelscher 2023;Feldmann & Luna 2022;Lessing 2022). Such contexts of hybrid governance have an in-built 'violence multiplier effect,' incentivizing the establishment of criminal enterprises that raise the threat level; the higher degree of threat, the higher the rent-seeking potential (Kløve & Mehlum 2022).…”

“…Gangs also evaluate and adjust rates independently, before or without entering directly into negotiations. According to the owner of a bus route that was systematically extorted, the gang members had such intimate knowledge of the industry that not only did they know in advance if bus owners were planning on reporting them to the police, but they also knew that the bus sector was in dire straits financially, and so could not over-charge them, lest they run them out of business (Bull & Hoelscher 2023). When extortion of bus operators took off in the early-tomid 2000s, gangs charged some of them upward of USD 1,500 a month, and bus workers were routinely killed over the next decade.…”

MSME Legitimacy During a Pandemic

“…It is also recommended for MSME actors to be able to market their products through digital marketing and present products with various innovations, creations, attractive packaging, and of course product differentiation (Affandi et al, 2020). In showing that the pandemic contributed to a renegotiation of co-governance between the State and business associations and contribute to understandings of the dynamics of distributive politics and the co-governance of crisis; and the potential implications for a post-COVID-19 political economy in Latin America (Bull & Hoelscher, 2023).…”