Over the last half century, a state-planned Paraguayan port town on the Brazilian border (today Ciudad del Este) transformed into a key hub in global trading networks. Called by some the “largest illicit economy in the Western Hemisphere” (Brown, 2009), Ciudad del Este’s border trade has provided livelihood for tens of thousands of small-scale Brazilian traders and Paraguayan street vendors who connect the Brazilian middle classes with cheap consumer goods from East Asia. The vibrant border trade also draws diaspora businessmen from Lebanon to Seoul. Paraguayan state policies protect the tax differentials the enable the border trade in its legal moments and—directly and indirectly—have enabled the practices of contraband for which the city is known. Indeed, legal transgression is an economic strategy that transcends class and imbricates state officials. As a hub city crucial to global commodity circulation, Ciudad del Este is a strategic site from which to study the emergent forms of governance that enable expanding networks of extralegal trade, and the regulation of informal economies more generally. Not only are extralegal economies a crucial means of livelihood for the poor across the Global South but the political relationships that enable these trade networks—and their supportive spatial forms—can buttress exclusionary trajectories of urban development.
Yet critical scholarship on Latin American cities has largely neglected the articulations between extralegal trade networks, state practice, and everyday urban politics. My work addresses this gap with a critical ethnography of regulatory practice and city-building from Ciudad del Este’s founding as the eponymous port town of the authoritarian president Alfredo Stroessner, through its zenith as a contraband hub, to contemporary state projects to “formalize” the border trade and urban space. This dissertation draws from archival research, fifteen months of participant observation and over 100 in-depth interviews to examine the cultural politics of extralegality as a mode of livelihood, accumulation and city-building.
In this dissertation I argue, first, that state-formation, urban planning practice and contraband economies are co-constitutive, that is, each is a historically specific process emerging in and through dynamic inter-relationships with each other. Crucially, new modes of frontier governance retain intense flexibility in interpreting and enforcing the law that characterized authoritarian rule. However, contemporary spatialized strategies of governance articulate new visions and capacities of the local state to act as an agent of frontier urbanization. Second, frontier state practices inscribe the extralegal economy into the built environment through a spatial form that I call contraband urbanism. Even as official discourse promises to formalize the border trade, through contraband urbanism local state officials make urban spaces for the extralegal economy through state-sponsored transgressions of the law, while also generating uncertainty over tenure rights for street vendors. Contraband urbanism is also an imaginative project, and I describe how local state actors harness ascendant discourses of the city as a globally competitive unit, while smuggling in the very economic practices that are supposedly banished by the formalized city. Third, I complement this macro-level analysis with a focus on the micro-politics of the regulatory interface between municipal officials and Paraguayan street vendors. I describe how municipal officials govern through regulatory uncertainty, practices which reverberate through collective ‘structures of feeling.’ Unpredictability and negotiability in municipal enforcement practices are so central to the city’s spatial management that the emotional reverberations of regulatory uncertainty must be thought of as an effect of the state. The resulting affective politics of precarity challenge notions of the independent, liberal self, and point to an imagining of urban belonging which is based in the needs of interdependent urban residents, rather than in the equal rights of citizens before the law.
These findings are relevant for understanding the dynamics of extralegality more broadly, including the ways in which outlaw economies, and their supportive spatial forms, are internal to globalized capitalism. Further, these findings point to the necessity of rethinking the orienting purpose of cities in ways that valorize rights to livelihood; promote urban development policies that include the urban poor as protagonists of development, rather than as beneficiaries; and expand the sites of urban politics to include the affective dimensions of governance.
