An interesting New Yorker article outlines, Operation Ceasefire, an anti-gang violence program in Cincinnati:

“David Kennedy, a professor from John Jay College of Criminal Justice, went to Cincinnati in the fall of 2006 to pitch his program, which is sometimes known as Ceasefire. Ceasefire begins with the fact that a small number of hardened criminals commit a hugely disproportionate number of serious violent crimes. Kennedy explained that, in Cincinnati, the police would identify gang members who were on parole or probation and compel them to attend a meeting. There, the cops would demand that the shootings end, and promise that, if they did not, the punishment would be swift and severe and target the entire gang. The city would also make life coaching and job counseling available to those who wanted out of the thug life.”

It seems the economic logic is this: You might not have the evidence or ability to punish only the few hardened criminals.  If you punish the entire gang, they have good incentives to monitor the guy doing the violent crime.  On the face of it, it seems as if it is futile to  punish the innocent gang members but if they have a monitoring role they become like extra police officers.  It’s hard and dangerous to reward them for turning in fellow gang members so carrot incentives are impossible.  But stick incentives are not.