What is the relationship between urban informality and violence? Through case evidence from Mexico, this paper attempts to understand the relationship between the two. It establishes that there is a clear divide between the formal city and the informal city, wherein the informal city functions as its own autonomous region, with informal leaders assuming power through sheer capacity to enforce brute force and violence to govern the city. I substantiate my theory and conclude that there is a positive relationship between informality and violence by drawing on three examples: the case of illegal import of used cars from the United States into Mexico and the shadow licensing system in Mexico; the case of trade of counterfeit or pirated goods in Mexico and its association with organized crime; and the propensity of informal micro entrepreneurs to resist entering the formal market and to instead choose informality despite its association with crime and violence.

Urban informality is rapidly spreading across much of the developing world, with implications for the economic, political and social domains. This paper studies urban informality as a site for critical analysis to assess its relationship to increasing urban violence in Mexico. Informality is often perceived with a dichotomy: on one hand, it is an unorganized and unregulated sector that is rapidly spreading in a haphazard manner across urban areas, with increased burden on urban public goods; while on the other hand, it is perceived as an opportunity for the marginalized to break away from the social exclusion, and engage economically and politically in urban life (Banks et al., 2020). Urban informality often refers to the urban poor, who live and work in urban areas, and access public services, rights and entitlements through informal channels (Banks et al., 2020). However, Herrle & Fokdal (2011) warn that informality, too often, has static categorizations as a sector, setting or outcome, that does not fully address its ever-changing formations and the implications on society as a consequence. This critical component of urban development must be closely observed to recognize its structural ambiguity and investigate how informality can serve as a ground for extraction, exploitation and exclusion (Banks et al., 2020). This will establish firm ground for identifying underlying tensions, analyzing their potential for causing violence in urban societies, and exploring the relationship between increased urban informality and increased violence. Banks et al (2020) explain that to understand formality requires a differential analysis of actors, and the informal ways in which they are connected to the means of making a living, to housing and to governance processes. This understanding is also critical to develop lines of enquiry into how groups exploit and sustain informal systems in the interest of power, profit or to avoid the cost of regulation and taxation.

This paper is structured into four sections: the first section presents scholarly literature exploring the relationship between urban informality and violence in Latin America; the second section explains the case evidence from Mexico to understand the impact of increased urban informality on violence; the third section states the theory that urban informality has a positive relationship to violence in Mexico, and discusses the substantiated evidence; the fifth section concludes the paper.