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The good, the bad and the ugly: the socioeconomic impact of drug cartels and their violence

Author

Listed:
  • Roxana Gutiérrez-Romero
  • Mónica Oviedo

Abstract

This article assesses the impact of drug cartels in Mexico, a country that has witnessed an unprecedented expansion of cartels and wave of drug-related violence since mid-2000. Using the difference-in-difference kernel matching method, the article finds that the areas most plagued by drug-related violence suffered a steep decline in production, profits, salaries, the number of businesses and workers in manufacturing. Unemployment and poverty also rose in the most violent areas. The few areas where cartels managed to work free of drug-related killings failed to see a change in poverty or unemployment, contradicting anecdotal storytelling of cartels benefiting local economies.

Suggested Citation

  • Roxana Gutiérrez-Romero & Mónica Oviedo, 2018. "The good, the bad and the ugly: the socioeconomic impact of drug cartels and their violence," Journal of Economic Geography, Oxford University Press, vol. 18(6), pages 1315-1338.
    • Handle: RePEc:oup:jecgeo:v:18:y:2018:i:6:p:1315-1338.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbx034
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    Citations

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    Cited by:

    1. Roxana Gutiérrez-Romero & Nayely Iturbe, 2023. "Why are Mexican politicians being assassinated?: The role of oil theft and narcocracy and the electoral consequences of organized crime," WIDER Working Paper Series wp-2023-7, World Institute for Development Economic Research (UNU-WIDER).
    2. Roxana Gutiérrez-Romero, 2020. "Conflict in Africa during COVID-19: social distancing, food vulnerability and welfare response," Working Papers 104, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    3. Gorrín, Jesús & Morales-Arilla, José & Ricca, Bernardo, 2023. "Export side effects of wars on organized crime: The case of Mexico," Journal of International Economics, Elsevier, vol. 144(C).
    4. Elisa GIULIANI, 2020. "Putting human rights into regional growth agendas: Where we stand and where we ought to go," Papers in Evolutionary Economic Geography (PEEG) 2042, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2020.
    5. Roxana Guti'errez-Romero, 2020. "Conflict in Africa during COVID-19: social distancing, food vulnerability and welfare response," Papers 2006.10696, arXiv.org.
    6. Jori Breslawski & Colin Tucker, 2022. "Ideological motives and taxation by armed groups," Conflict Management and Peace Science, Peace Science Society (International), vol. 39(3), pages 333-350, May.

    More about this item

    Keywords

    Drug cartels; violence; impact evaluation; poverty; local economy; kernel matching;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • R59 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Other

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