Organized crime, local politicians, and state capacity

This paper examines how the assassination of mayors affects local government capacity, leveraging quasi-random variation in the success of assassination attempts against Mexican mayors. Compared to municipalities with failed attempts, tax collection falls by 29% and public expenditures shift from essential services to construction investments in municipalities with successful assassinations. The evidence is most consistent with institutional disruption from the sudden loss of mayors, rather than the violent act itself. These effects attenuate when control municipalities also experience mayoral absence. In addition, there is suggestive evidence that effects are amplified in municipalities with mayors possessing weaker political connections. In contrast, changes in security environments, municipal personnel composition, non-political violence, economic activity, demographics, and electoral dynamics do not account for the observed patterns. The results highlight how the loss of decision-makers in violent environments undermines local state capacity.