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Cocaine Cities: Exploring the Relationship between Urban Processes and the Drug Trade in South America

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  • Ignacio A. Navarro

Abstract

The relationship between the cocaine trade and urban land markets in South America has been overlooked by the mainstream economics and urban studies literature. This paper examines two avenues through which the cocaine trade can have a large impact on urban development in producer countries: (i) through an employment multiplier effect similar to that of other legal exports, and (ii) through money laundering using urban real estate. We test our hypotheses using the Bolivian case and find that urban growth patterns are closely related to fluctuations in cocaine production.

Suggested Citation

  • Ignacio A. Navarro, 2011. "Cocaine Cities: Exploring the Relationship between Urban Processes and the Drug Trade in South America," WIDER Working Paper Series wp-2011-009, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2011-009
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2011-009.pdf
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    References listed on IDEAS

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    1. Rasul Shams, 1992. "The drugs economy and anti-drug policy in developing countries," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 27(3), pages 139-144, May.
    2. Daniel Mejía & Carlos E. Posada, 2007. "Cocaine Production and Trafficking: What do we know?," Borradores de Economia 3955, Banco de la Republica.
    3. Thaler, Richard, 1978. "A note on the value of crime control: Evidence from the property market," Journal of Urban Economics, Elsevier, vol. 5(1), pages 137-145, January.
    4. Wheaton, William C., 1974. "A comparative static analysis of urban spatial structure," Journal of Economic Theory, Elsevier, vol. 9(2), pages 223-237, October.
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