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Reflections on Drug-cartel Fighting: The Case of Mexico

Author

Listed:
  • Juan Carlos Pérez Velasco Pavón

    (Profesor, Facultad de Economía y Negocios, Universidad Anáhuac, México, D.F. Mexico)

Abstract

Some countries, including Mexico, are drug producers and exporters, although their domestic consumption is relatively low. They count with very few tools and resources to reduce drug demand (this, due to an exogenous variable), but they face a high social cost which is mainly caused by the activities of criminal groups. The main purpose of this paper is to analyze these groups using economic theory, and comes to it showing two things: a) production and drug traffic induce criminality, and the delinquents have a high probability of becoming hitmen, and b) public spending to fight drug cartels can cause criminals to violate agreements among them, leading to an increase in violence. Evidence for Mexico is presented.

Suggested Citation

  • Juan Carlos Pérez Velasco Pavón, 2013. "Reflections on Drug-cartel Fighting: The Case of Mexico," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(3, Cierre), pages 5-64.
    • Handle: RePEc:emc:ecomex:v:22:y:2013:i:3:p:5-64
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    File URL: http://www.economiamexicana.cide.edu/num_anteriores/Cierre-1/01_EM_CPerez_Velasco_(5-64).pdf
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    More about this item

    Keywords

    Crime; drugs; labor supply; labor demand; transaction costs; Mexico.;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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