IDEAS home Printed from https://ideas.repec.org/p/baf/cbafwp/cbafwp22171.html
   My bibliography  Save this paper

Fueling Organized Crime: The Mexican War on Drugs and Oil Thefts

Author

Listed:
  • Giacomo Battiston
  • Gianmarco Daniele
  • Marco Le Moglie
  • Paolo Pinotti

Abstract

We show that the War on Drugs launched by the Mexican President Felipe Calderón in 2007 pushed drug cartels into large-scale oil thefts. Municipalities that the presidential candidate’s party barely won at the local elections in 2007-2009 exhibit a larger increase in illegal oil taps over the following years, compared to municipalities in which the presidential candidate’s party barely lost the elections. Challenger cartels in the drug market leapfrog incumbent drug cartels when entering the new illegal activity, analogous to what is typically observed in legal markets. Since challengers and incumbents specialize in different criminal sectors, the expansion of challengers does not increase violence in municipalities traversed by oil pipelines. At the same time, the municipalities traversed by a pipeline witness a decrease in schooling rates.

Suggested Citation

  • Giacomo Battiston & Gianmarco Daniele & Marco Le Moglie & Paolo Pinotti, 2022. "Fueling Organized Crime: The Mexican War on Drugs and Oil Thefts," BAFFI CAREFIN Working Papers 22171, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    • Handle: RePEc:baf:cbafwp:cbafwp22171
    as

    Download full text from publisher

    File URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp22171.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ariaster B. Chimeli & Rodrigo R. Soares, 2017. "The Use of Violence in Illegal Markets: Evidence from Mahogany Trade in the Brazilian Amazon," American Economic Journal: Applied Economics, American Economic Association, vol. 9(4), pages 30-57, October.
    2. Dorothy Kronick, 2020. "Profits and Violence in Illegal Markets: Evidence from Venezuela," Journal of Conflict Resolution, Peace Science Society (International), vol. 64(7-8), pages 1499-1523, August.
    3. Francesco Caselli & Massimo Morelli & Dominic Rohner, 2015. "The Geography of Interstate Resource Wars," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 267-315.
    4. Lindo, Jason M. & Padilla-Romo, María, 2018. "Kingpin approaches to fighting crime and community violence: Evidence from Mexico's drug war," Journal of Health Economics, Elsevier, vol. 58(C), pages 253-268.
    5. Juan Camilo Castillo & Daniel Mejía & Pascual Restrepo, 2020. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War," The Review of Economics and Statistics, MIT Press, vol. 102(2), pages 269-286, May.
    6. Mounu Prem & Juan F. Vargas & Daniel Mejía, 2023. "The Rise and Persistence of Illegal Crops: Evidence from a Naive Policy Announcement," The Review of Economics and Statistics, MIT Press, vol. 105(2), pages 344-358, March.
    7. Pinotti, Paolo, 2020. "The credibility revolution in the empirical analysis of crime," CEPR Discussion Papers 14850, C.E.P.R. Discussion Papers.
    8. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    9. Andrew Gelman & Guido Imbens, 2019. "Why High-Order Polynomials Should Not Be Used in Regression Discontinuity Designs," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(3), pages 447-456, July.
    10. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust Nonparametric Confidence Intervals for Regression‐Discontinuity Designs," Econometrica, Econometric Society, vol. 82, pages 2295-2326, November.
    11. Paolo Pinotti, 0. "The Credibility Revolution in the Empirical Analysis of Crime," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 0, pages 1-14.
    12. Melissa Dell, 2015. "Trafficking Networks and the Mexican Drug War," American Economic Review, American Economic Association, vol. 105(6), pages 1738-1779, June.
    13. Sebastian Calonico & Matias D Cattaneo & Max H Farrell, 2020. "Optimal bandwidth choice for robust bias-corrected inference in regression discontinuity designs [Econometric methods for program evaluation]," The Econometrics Journal, Royal Economic Society, vol. 23(2), pages 192-210.
    14. Francesco Caselli, 2012. "The Geography of Inter-State Resource Wars," 2012 Meeting Papers 1174, Society for Economic Dynamics.
    15. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    16. Mejia, Daniel & Restrepo, Pascual, 2016. "The economics of the war on illegal drug production and trafficking," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 255-275.
    17. Benjamin A. Olken & Patrick Barron, 2009. "The Simple Economics of Extortion: Evidence from Trucking in Aceh," Journal of Political Economy, University of Chicago Press, vol. 117(3), pages 417-452, June.
    18. Daniele, Gianmarco & Le Moglie, Marco & Masera, Federico, 2023. "Pains, guns and moves: The effect of the U.S. opioid epidemic on Mexican migration," Journal of Development Economics, Elsevier, vol. 160(C).
    19. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-1219, December.
    20. Paolo Pinotti, 2020. "The credibility revolution in the empirical analysis of crime," BAFFI CAREFIN Working Papers 20144, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    21. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1384-1421.
    22. Tyler Moore & Richard Clayton & Ross Anderson, 2009. "The Economics of Online Crime," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 3-20, Summer.
    23. Nicolas Berman & Mathieu Couttenier & Dominic Rohner & Mathias Thoenig, 2017. "This Mine Is Mine! How Minerals Fuel Conflicts in Africa," American Economic Review, American Economic Association, vol. 107(6), pages 1564-1610, June.
    24. Fudenberg, Drew & Gilbert, Richard & Stiglitz, Joseph & Tirole, Jean, 1983. "Preemption, leapfrogging and competition in patent races," European Economic Review, Elsevier, vol. 22(1), pages 3-31, June.
    25. Daron Acemoglu & Giuseppe De Feo & Giacomo Davide De Luca, 2020. "Weak States: Causes and Consequences of the Sicilian Mafia," Review of Economic Studies, Oxford University Press, vol. 87(2), pages 537-581.
    26. Jeremy Proville & Daniel Zavala-Araiza & Gernot Wagner, 2017. "Night-time lights: A global, long term look at links to socio-economic trends," PLOS ONE, Public Library of Science, vol. 12(3), pages 1-12, March.
    27. Gianluca Fiorentini & Stefano Zamagni (ed.), 1999. "The Economics of Corruption and Illegal Markets," Books, Edward Elgar Publishing, volume 0, number 1589.
    28. Fiorentini,Gianluca & Peltzman,Sam (ed.), 1997. "The Economics of Organised Crime," Cambridge Books, Cambridge University Press, number 9780521629553.
    29. Murphy, Tommy E. & Rossi, Martín A., 2020. "Following the poppy trail: Origins and consequences of Mexican drug cartels," Journal of Development Economics, Elsevier, vol. 143(C).
    30. Alejandro del Valle & Alain de Janvry & Elisabeth Sadoulet, 2020. "Rules for Recovery: Impact of Indexed Disaster Funds on Shock Coping in Mexico," American Economic Journal: Applied Economics, American Economic Association, vol. 12(4), pages 164-195, October.
    31. Paolo Pinotti, 2015. "The Economic Costs of Organised Crime: Evidence from Southern Italy," Economic Journal, Royal Economic Society, vol. 125(586), pages 203-232, August.
    32. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
    33. Gary S. Becker & Kevin M. Murphy & Michael Grossman, 2006. "The Market for Illegal Goods: The Case of Drugs," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 38-60, February.
    34. Castillo, Juan Camilo & Kronick, Dorothy, 2020. "The Logic of Violence in Drug War," American Political Science Review, Cambridge University Press, vol. 114(3), pages 874-887, August.
    35. Paolo Pinotti, 2020. "The Credibility Revolution in the Empirical Analysis of Crime," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(2), pages 207-220, July.
    36. Gabriela Calderón & Gustavo Robles & Alberto Díaz-Cayeros & Beatriz Magaloni, 2015. "The Beheading of Criminal Organizations and the Dynamics of Violence in Mexico," Journal of Conflict Resolution, Peace Science Society (International), vol. 59(8), pages 1455-1485, December.
    37. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
    38. Dave Donaldson & Adam Storeygard, 2016. "The View from Above: Applications of Satellite Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 171-198, Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. López Cruz, Iván & Torrens, Gustavo, 2023. "Hidden drivers of violence diffusion: Evidence from illegal oil siphoning in Mexico," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 26-70.
    2. Daniele, Gianmarco & Le Moglie, Marco & Masera, Federico, 2023. "Pains, guns and moves: The effect of the U.S. opioid epidemic on Mexican migration," Journal of Development Economics, Elsevier, vol. 160(C).
    3. Vlado Vivoda & Ghaleb Krame & Martin Spraggon, 2023. "Oil Theft, Energy Security and Energy Transition in Mexico," Resources, MDPI, vol. 12(2), pages 1-15, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniele, Gianmarco & Le Moglie, Marco & Masera, Federico, 2023. "Pains, guns and moves: The effect of the U.S. opioid epidemic on Mexican migration," Journal of Development Economics, Elsevier, vol. 160(C).
    2. Hale Utar, 2018. "Firms and Labor in Times of Violence: Evidence from the Mexican Drug War," CESifo Working Paper Series 7345, CESifo.
    3. Giovanni Bernardo & Irene Brunetti & Mehmet Pinar & Thanasis Stengos, 2021. "Measuring the presence of organized crime across Italian provinces: a sensitivity analysis," European Journal of Law and Economics, Springer, vol. 51(1), pages 31-95, February.
    4. Lax-Martinez, Gema & Rohner, Dominic & Saia, Alessandro, 2022. "Threat of taxation, stagnation and social unrest: Evidence from 19th century sicily," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 361-371.
    5. Juan Camilo Castillo & Daniel Mejía & Pascual Restrepo, 2020. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War," The Review of Economics and Statistics, MIT Press, vol. 102(2), pages 269-286, May.
    6. Blattman, Christopher & Lessing, Benjamin & Tobon, Santiago & Duncan, Gustavo, 2021. "Gang rule: Understanding and Countering Criminal Governance," SocArXiv 5nyqs, Center for Open Science.
    7. Maria Micaela Sviatschi, 2022. "Making a NARCO: Childhood Exposure to Illegal Labor Markets and Criminal Life Paths," Econometrica, Econometric Society, vol. 90(4), pages 1835-1878, July.
    8. Axbard, Sebastian & Benshaul-Tolonen, Anja & Poulsen, Jonas, 2021. "Natural resource wealth and crime: The role of international price shocks and public policy," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    9. Ceren Baysan & Marshall Burke & Felipe González & Solomon Hsiang & Edward Miguel, 2018. "Economic and Non-Economic Factors in Violence: Evidence from Organized Crime, Suicides and Climate in Mexico," NBER Working Papers 24897, National Bureau of Economic Research, Inc.
    10. Christina Korting & Carl Lieberman & Jordan Matsudaira & Zhuan Pei & Yi Shen, 2023. "Visual Inference and Graphical Representation in Regression Discontinuity Designs," The Quarterly Journal of Economics, Oxford University Press, vol. 138(3), pages 1977-2019.
    11. Verme, Paolo & Schuettler, Kirsten, 2021. "The impact of forced displacement on host communities: A review of the empirical literature in economics," Journal of Development Economics, Elsevier, vol. 150(C).
    12. Mounu Prem & Juan F. Vargas & Daniel Mejía, 2023. "The Rise and Persistence of Illegal Crops: Evidence from a Naive Policy Announcement," The Review of Economics and Statistics, MIT Press, vol. 105(2), pages 344-358, March.
    13. Babii, Andrii & Kumar, Rohit, 2023. "Isotonic regression discontinuity designs," Journal of Econometrics, Elsevier, vol. 234(2), pages 371-393.
    14. Nicolas Berman & Mathieu Couttenier & Dominic Rohner & Mathias Thoenig, 2017. "This Mine Is Mine! How Minerals Fuel Conflicts in Africa," American Economic Review, American Economic Association, vol. 107(6), pages 1564-1610, June.
    15. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    16. Renzo Castellares & Morgane Fouché, 2017. "The Determinants of Social Conflicts in Mining Production Areas," Working Papers 100, Peruvian Economic Association.
    17. van der Ploeg, Frederick, 2018. "Political economy of dynamic resource wars," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 765-782.
    18. Leopoldo Fergusson & Pablo Querubin & Nelson A. Ruiz & Juan F. Vargas, 2021. "The Real Winner's Curse," American Journal of Political Science, John Wiley & Sons, vol. 65(1), pages 52-68, January.
    19. Adhvaryu, Achyuta & Fenske, James & Khanna, Gaurav & Nyshadham, Anant, 2021. "Resources, conflict, and economic development in Africa," Journal of Development Economics, Elsevier, vol. 149(C).
    20. Muyang Ge & Eric C. Edwards & Sherzod B. Akhundjanov, 2020. "Irrigation Investment on an American Indian Reservation," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(4), pages 1083-1104, August.

    More about this item

    Keywords

    Organized crime; War on Drugs; Oil thefts; Leapfrogging;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:baf:cbafwp:cbafwp22171. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michela Pozzi (email available below). General contact details of provider: https://edirc.repec.org/data/cbbocit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.