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Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War

Author

Listed:
  • Juan Camilo Castillo

    () (Stanford University)

  • Daniel Mejia

    () (Universidad de los Andes)

  • Pascual Restrepo

    () (Boston University)

Abstract

This paper asks whether scarcity increases violence in markets that lack a centralized authority. We construct a model in which, by raising prices, scarcity fosters violence. Guided by our model, we examine the link between scarcity and violence in the Mexican cocaine trade. At a monthly frequency, scarcity created by cocaine seizures in Colombia—Mexico’s main cocaine supplier—increases violence in Mexico. The effects are larger in municipalities near the US, with multiple cartels, and with strong PAN support. Between 2006 and 2009 the decline in cocaine supply from Colombia could account for 10%-14% of the increase in violence in Mexico.

Suggested Citation

  • Juan Camilo Castillo & Daniel Mejia & Pascual Restrepo, 2018. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-314, Boston University - Department of Economics.
  • Handle: RePEc:bos:iedwpr:dp-314
    as

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    Cited by:

    1. Mejía, Daniel & Vargas, Juan F. & Prem, Mounu, 2019. "The rise and persistence of illegal crops: evidence from a naive policy announcement," Working papers 17, Red Investigadores de Economía.
    2. Sandra V. Rozo & Therese Anders & Steven Raphael, 2021. "Deportation, crime, and victimization," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(1), pages 141-166, January.
    3. Rozo, Sandra V. & Anders, Therese & Raphael, Steven, 2020. "Deportation, Crime, and Victimization," GLO Discussion Paper Series 545, Global Labor Organization (GLO).
    4. 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.
    5. Blattman, Christopher & Lessing, Benjamin & Tobon, Santiago & Duncan, Gustavo, 2021. "Gang rule: Understanding and Countering Criminal Governance," SocArXiv 5nyqs, Center for Open Science.
    6. Baysan, Ceren & Burke, Marshall & González, Felipe & Hsiang, Solomon & Miguel, Edward, 2019. "Non-economic factors in violence: Evidence from organized crime, suicides and climate in Mexico," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 434-452.

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    More about this item

    Keywords

    War on Drugs; Violence; Illegal Markets; Mexico; Cocaine Trade;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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