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The Economic Consequences of the Mexican Drug War

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  • Balmori de la Miyar Jose Roberto

    (Universidad Anahuac Mexico – Business School, Av. de las Torres No. 131 Olivar de los Padres, Mexico City 01780, Mexico)

Abstract

Military crackdowns often disrupt economic development by exacerbating violence. This paper examines the case of the Mexican Drug War, employing synthetic control methods. To prove causality, I use variation on statewide military operations, as well as the rollout of the war. Findings indicate a decrease in GDP per capita equal to 0.5%, in states with military operations. Determinants by which the Mexican Drug War hampered economic development include a proportional reduction in consumption per capita, and a decline in productive investment of at least 0.3%, driven by a drop of 3.2% in commercial credit granted to businesses.

Suggested Citation

  • Balmori de la Miyar Jose Roberto, 2016. "The Economic Consequences of the Mexican Drug War," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(3), pages 213-246, August.
    • Handle: RePEc:bpj:pepspp:v:22:y:2016:i:3:p:213-246:n:3
    DOI: 10.1515/peps-2016-0014
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    References listed on IDEAS

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    Cited by:

    1. Jose Roberto Balmori de la Miyar, 2020. "Breaking sad: drug-related homicides and mental well-being in Mexico," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(4), pages 513-531, December.
    2. René Cabral & André Varella Mollick & Eduardo Saucedo, 2019. "Foreign Direct Investment In Mexico, Crime, And Economic Forces," Contemporary Economic Policy, Western Economic Association International, vol. 37(1), pages 68-85, January.
    3. Mascarúa Lara Miguel A., 2022. "Imperfect Law Enforcement, Informality, and Organized Crime," Working Papers 2022-16, Banco de México.
    4. Cabral Torres René & Mollick André V. & Saucedo Eduardo, 2018. "The Impact of Crime and Other Economic Forces on Mexico's Foreign Direct Investment Inflows," Working Papers 2018-24, Banco de México.
    5. Verteramo Chiu, Leslie J. & Turvey, Calum G., 2015. "Perception and Action in a Conflict Zone: a Study of Rural Economy and Rural Life amidst Narcos in Northeastern Mexico," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205447, Agricultural and Applied Economics Association.
    6. Francesco Calderoni & Elisa Superchi & Tommaso Comunale & Gian Maria Campedelli & Martina Marchesi & Niccolò Frualdo, 2019. "PROTOCOL: Organised crime groups: A systematic review of individual‐level risk factors related to recruitment," Campbell Systematic Reviews, John Wiley & Sons, vol. 15(1-2), June.

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