In a draft paper for a National Defense University journal, former Washington Post reporter and International Assessment and Strategy Center (IASC) fellow Douglas Farah argues that Mexican transnational criminal organizations (TCOs) have consolidated in Guatemala, Honduras, and El Salvador, also known as the Northern Triangle, to the extent that they have become the de facto authority, making the state "almost non-functional."

[Read the paper here pdf. Disclosure: InSight Crime co-director Steven Dudley also contributed reporting to this paper.]

In Farah's view, this has the potential to turn the Northern Triangle countries into criminal, rather than simply weak, states. His key points include:

1. Real power now rests with the TCOs and their allies. Mexican criminal groups have co-opted already weak government structures in the three countries through contacts in corrupt security, justice and government bodies. This in turn has paved the way for the entry of other TCOs such as Colombian guerrillas from the FARC, the Spanish separatist group ETA, and even Hezbollah.

"There are virtually no 'ungoverned spaces' in the region," Farah writes. "What has changed is that the authority is less and less often the state."

This is reflected in decreasing state resources and accessible to citizens, as well as citizen perceptions of state incompetence, Farah states.

In contrast with the transport groups that existed in the Northern Triangle prior to the infiltration of Mexican criminal groups, the TCOs work to control territory, which they use to set up power bases and front businesses, including private security firms. According to Farah, territorial control is a key element of TCO power consolidation, allowing them to fulfill functions traditionally associated with the state. He notes that this is less true in El Salvador, where the street gangs, or "maras," not the TCOs, have the most power.

2. The states themselves have allowed this power shift to happen. "The state itself at times becomes a part of the criminal enterprise," writes Farah, adding that Central America's Northern Triangle is particularly attractive to criminal groups because TCOs are drawn to weak rather than failed states. While a failed state may have no real institutional structure to work with, weak state institutions provide the opportunity to co-opt security bodies, law enforcement officials, judicial officials, and politicians.

Criminals work with the state through what Farah calls a "transactional paradigm" -- for example, police perform executions in exchange for money. According to Farah, this paradigm helps to explain "anomalies" present in these states, such as the persistence of extremely high homicide rates despite extremely high levels of incarceration.

3. The United States sees the risk, but is taking inappropriate measures. The United States recognizes that it will be affected by a loss of rule of law in Central America, not least because of the large amount of US-bound cocaine flowing through the region. However, the United States has continued to funnel money into anti-drug efforts in these corrupt, weak states, which are unable or unwilling to effectively use these funds, Farah says. The United States also lacks trustworthy public officials with whom to build relationships in these countries. Farah notes that the United States has helped directly contribute to the problem, deporting thousands of gang members back to these already weak and overburdened states.

Meanwhile, Mexico and other Central American governments have increasingly shifted their focus to violence reduction over anti-drug efforts, a strategy which is arguably based on the assumption that large-scale criminal structures will always exist. The United States has also shifted policy somewhat, focusing more on economic and trade issues in the region.

InSight Crime Analysis

The question of whether the Northern Triangle nations -- particularly Honduras -- should justifiably be labeled "narco" or "failed" states has prompted plenty of debate. In 2011, a Costa Rican non-governmental organization (NGO) concluded that several Central American nations were at risk of becoming "failed states" -- with Honduras labeled the most at risk -- in an assessment based on the degree of economic insecurity and political turmoil within a given country. 

As noted by InSight Crime at the time, the very definition of what properly constitutes a "failed" state varies widely. It is clear that there are large sections of "ungoverned spaces" in Central America, where the state has lost its monopoly on the use of force. But as Farah argues, this is not the only problem: the governments in the Northern Triangle have already passed a "tipping point" in terms of controlling their territory. So great is the power of the TCOs that Guatemala, El Salvador, and Honduras are losing the ability to tackle their security problems in ways that strengthen the rule of law or the democratic process. 

Extremely low confidence in police and justice systems, evidenced by a proliferation of private security firms, is an indicator of the lack of state control in all of these countries. Up to 200,000 private security personnel are believed to be present in the Northern Triangle countries, significantly outnumbering police officers. In this context, the idea that TCOs use private security as a front business for illegal operations -- something previously noted by InSight Crime with regard to Honduras -- is troubling, and gives credence to the argument that it is not the government, but criminal groups, that exert the most influence over security issues.

Farah's argument of a criminalized state is most plausible in Honduras, the country with the highest homicide rate in the world, where the police force has close links to organized crime, police investigate only 21 percent of crimes and even the country's attorney general resigned amidst calls for his impeachment over financial irregularities and incompetence.

While Guatemala and El Salvador also face serious problems with corruption, the problem appears to be slightly less acute than in Honduras. One indicator of this is Transparency International's Corruption Perceptions Index, where Honduras ranked 133 out of 176 countries in 2012, while Guatemala scored 113 and El Salvador 83.

There are small signs that all three Northern Triangle governments are making efforts to combat the wave of transnational crime, establish state legitimacy and reduce violence. In Guatemala, the International Commission against Impunity in Guatemala (CICIG) has worked hard to tackle impunity and corruption, even opening investigations into 13 judges accused of issuing lenient sentences to drug traffickers.

Honduras, meanwhile, is involved in an ongoing, if inefficient and problematic, police reform process, and in El Salvador, the truce between street gangs, despite its problems, is a bold anti-violence experiment. While these measures may not be sufficient, they should not be discounted completely.

In the context of increasingly criminalized states, Farah recommends that the United States focus resources on understanding the new TCO paradigm and its economic implications, as well as reconsidering the nature of aid given to these countries. One possibility mentioned was focusing funds on the creation of small, screened, police units that communicate and cooperate effectively instead of sweeping reform.

Regardless of the level of cooptation of Northern Triangle governments and security forces, the recommendation that the United States changes its aid paradigm is sensible. As noted by the Council on Hemispheric Affairs, much US technical assistance and equipment provided through the Central American Regional Security Initiative (CARSI) gets funneled into the countries' militaries, and the militaries are in turn being used to fulfill traditional police functions. This not only raises concerns related to corruption in the security forces, but also over human rights violations arising from the militarization of security.

The question of whether the Northern Triangle countries can be considered genuine "narco-states" or "failed states" ultimately depends on the definitions used. However, what is clear is that these states are failing to provide citizens with even minimal levels of security and justice, and as the paper suggests, the biggest factor in this is the insidious and corrupting presence of organized crime.