However, the new research by the University for Peace fundamentally challenges this framework. According to the study, we are no longer dealing merely with commercial violations or conventional bribery, but with the emergence of a new phenomenon known as Criminal Governance.
This phenomenon emerges when the boundaries between the state and criminal actors disappear, and illegal networks move beyond simply generating profits to performing state functions, including establishing local rules, imposing taxes, resolving social disputes, providing security, and even delivering public services to citizens.
For regions such as the Middle East, particularly Iraq and disputed territories, which are characterized by unstable geography, porous borders, and multiple non-state armed actors, this concept provides an essential tool for assessing threats on a scientific and realistic basis.
Part One: The Core Concept of Criminal Governance
Criminal governance refers to a situation in which armed groups, smuggling networks, or cartels impose a social order on the inhabitants of a particular area and establish lasting control over their daily lives.
This form of governance operates on four main pillars:
1. Monopoly on Violence and the Provision of Alternative Security
Criminal groups do not use violence solely to eliminate their rivals. They also employ violence in a quasi-legal manner to maintain security in the areas they control.
In places where police and official security forces are absent or have lost public trust, these groups become judges. They prohibit theft and harassment, prevent disorder, and demand complete obedience from residents in return.
2. Imposing Taxes and Extortion (Extortion as Taxation)
Collecting money is no longer merely a mafia threat. Within criminal governance, it becomes a formal and recurring practice.
Shopkeepers, truck drivers, construction companies, and even public institutions regularly pay fixed amounts to these groups in exchange for permission to operate and protection of their property.
This money resembles official taxation, but instead flows into the coffers of non-state groups.
3. Dispute Resolution
When state courts are slow, corrupt, or unable to access certain areas, citizens take their family, commercial, and tribal disputes to the commanders or leaders of criminal networks.
The decisions of these leaders are enforced immediately because they are backed by armed force, granting them a form of de facto legitimacy.
4. Providing Services and Artificial Charity
Criminal networks spend part of their stolen assets or smuggling revenues on purchasing medicine for the poor, extending electricity and water networks, or renovating public spaces.
This is not an act of goodwill. Rather, it is a strategic investment intended to secure the support of local residents, effectively using them as a human shield against state security forces.
Part Two: The Concept of State Capture from a New Perspective
One of the book's most important themes is its analysis of the relationship between these groups and official institutions.
The research emphasizes that these groups do not seek to destroy the state entirely, because a collapsed state does not serve their interests. Instead, they need a formal state framework that provides them with passports, customs permits, bank accounts, and legal protection.
The process of state capture progresses through three main stages:
Stage One: Infiltration
Bribing low-ranking officials, border checkpoint officers, and local judges through financial incentives or direct threats, with the aim of securing protection for smuggling routes and money-laundering operations.
Stage Two: Co-optation and the Use of Authority
Placing affiliated candidates in elected councils, municipalities, and parliament.
At this stage, representatives of these networks reshape laws and regulations to facilitate illegal commercial monopolies and conceal the sources of criminal revenue.
Stage Three: Hybridization
This is the most dangerous stage, in which the distinction between a state official and a criminal network leader disappears.
Senior officials use their official positions and state security institutions to protect smuggling routes, illegal arms and oil trade, and suppress rivals who threaten their interests.
At this point, the state becomes a legal façade for managing an illegal economy.
Part Three: Illegal Economies as Instruments of Power
The book demonstrates through detailed data that the illegal economy is no longer a marginal activity. Instead, it has become a primary driver of political power in many unstable countries.
These networks rely on several key sectors:
1. Porous Border Crossings and Smuggling
Controlling official and unofficial border crossings is the largest source of revenue.
Smuggling fuel, narcotics, weapons, and untaxed consumer goods generates millions of dollars daily for these groups.
Part of this enormous capital is used to strengthen their military wings, while the remainder is spent on purchasing votes and securing political loyalty during elections.
2. Money Laundering Through the Public and Construction Sectors
Criminal proceeds are channelled into official projects in housing, telecommunications, and government contracts.
When illegal money enters the formal economy, criminal figures are transformed into respectable businesspeople and philanthropists, making legal prosecution against them extremely difficult.
Part Four: Why Have Iron-Fist Policies and Military Responses Failed?
A fundamental section of Dr. Vieira's research is devoted to evaluating military campaigns carried out by various governments under the banner of the "War on Crime" or the Iron Fist policy (Mano Dura).
The author explains why this approach has not only failed to resolve the problem but has often deepened the crisis.
1. Fragmentation of Violence
When the state attacks and kills or arrests the leader of a cartel or armed network, the group does not necessarily disappear. Instead, it fragments into several smaller and more radical factions.
These new factions engage in bloody conflicts with one another to demonstrate their power and control territory, causing murder and violence rates within society to rise several times over.
2. Loss of Public Trust and Human Rights Violations
Large-scale military operations often harm civilians because of indiscriminate actions and the excessive use of force.
When the army or security forces conduct indiscriminate raids on homes and arrest young people, citizens begin to view the state as an occupying force. Psychologically, they may become more closely aligned with local criminal groups, which are part of their own communities.
3. Failure to Address Root Causes
An iron-fist policy can kill an armed individual, but it cannot eliminate unemployment, poverty, corruption within the judiciary, or the absence of public services.
As long as the black market remains the primary source of employment for young people, every trafficker eliminated will immediately be replaced by ten others.
Part Five: A Strategy for Building Resilience – How Can Criminal Governance Be Confronted?
Instead of relying solely on military approaches, the book proposes the concept of building institutional and societal resilience.
This means that the state and society must develop the capacity to protect themselves against the infiltration of illegal networks and prevent institutional collapse.
The resilience-building strategy consists of four parallel approaches:
1. Advanced Financial Intelligence (Follow the Money)
Instead of hunting down low-level armed individuals on the streets, security agencies should focus on financial networks, the Hawala system, money laundering through the real estate sector, and exposing shell companies used by senior officials to conceal illegal revenues.
Targeting the financial resources of criminal groups can undermine their entire military capabilities and political influence.
2. Reclaiming Governance
The state cannot regain control of an area simply by establishing a security checkpoint there.
Alongside security forces, hospitals, impartial courts, schools, and basic services must also reach marginalized areas.
When citizens can resolve their legal disputes fairly through state courts, they will no longer need to turn to militia commanders and criminal networks.
3. Establishing Protections for the Judiciary and Police
Criminal networks gain control over judges and local police officers through threats and bribery.
To protect these sectors, it is necessary to establish systems for judicial protection, regularly rotate border checkpoint officers, and create specialized anti-corruption units that operate independently of domestic political pressure.
4. Promoting Civilian Oversight and Investigative Journalism
In most countries, the first actors to expose corruption and illegal networks are not security forces, but investigative journalists and civil society organizations.
Protecting freedom of information and encouraging civilian oversight increases the cost of corruption for criminal officials.
Part Six: An Analytical Perspective on the Security Environment in Iraq and the Kurdistan Region
When these arguments and findings are applied to our own security environment, several concerning similarities become apparent, which the TACK Center should carefully monitor.
1. The Problem of Unofficial Border Crossings
The existence of dozens of illegal crossing points along Iraq's borders with neighboring countries has created favorable conditions for armed networks that profit from smuggling oil, narcotics, and cigarettes.
The revenues generated through these crossings have provided certain actors with considerable military and financial power, enabling them to openly defy state laws.
2. The Capture of Public Institutions in Disputed Territories
In some areas characterized by security vacuums, armed groups fully assume the role of criminal governance.
They collect taxes from farmers and drivers, while commercial transactions take place under their control. This poses a major threat to the national security of the Kurdistan Region.
3. The Merging of Political Power with Protected Business Interests
The growth of companies and businesspeople who rely behind the scenes on armed power to influence tenders and economic projects marks the beginning of the state capture process.
If left unchecked, this could remove control over the economy and stability from the hands of official institutions.
Strategic Recommendations for Security Agencies and Policymakers
1. Establishing a Joint Financial Intelligence Fusion Center
Full coordination should be established among security agencies, the Integrity Commission, and the Central Bank to trace suspicious sources of wealth and combat money laundering through scientific methods.
2. Digitizing Border Crossings and Customs Operations
Removing human discretion from tax and customs collection and connecting all border crossings to digital monitoring systems would deliver a major blow to the financial resources of illegal networks.
3. Reforming Judicial and Public Service Sectors in Marginalized Areas
To prevent citizens from turning to informal and tribal authorities, judicial procedures must be swift and transparent, while the state must provide basic services to ensure that no space is left for criminal groups to exploit.
4. Raising Security Commanders' Awareness of Emerging Threats
Security officers and analysts must understand that future conflicts will not be limited to conventional terrorism. They will also involve sophisticated networks seeking to control society by combining money, power, and violence.
Source: Research by Dr. Mauricio Vieira, University for Peace (UPEACE), in partnership with the United Nations Commission. Published September 30, 2026.
