Presenter: Aline Gatignon

Associate Professor, Strategy and Business Policy

HEC Paris

Presentation

They don’t Really Care About Us: How Public Policies Can Unlock Growth in Disadvantaged Communities

Abstract

By offering a promising solution to violence in urban slums, community-based policing is often expected to help unlock socioeconomic development. The prevailing assumption is that reducing gang activity and restoring the rule of law should lower barriers to formal organizational and economic activity. We test this hypothesis by examining Rio de Janeiro’s Pacifying Police Units (UPPs) program, a large-scale public intervention aimed at improving security in favelas through community-based policing. While the program reduced violent crime, treated favelas experienced significantly weaker organizational and economic growth, with smaller increases in the number of formal organizations and jobs, driven by a decline in private sector firms. Qualitative evidence suggests that the displacement of local gangs, coupled with the lack of concurrent investment in formal institutions, created a climate of precarity and uncertainty inauspicious to organizational development. These findings highlight how interventions that enhance security but fail to strengthen institutional and economic scaffolding may inadvertently inhibit the emergence of sustainable formal organizations in contexts of deep informality.