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NAFTA and drug-related violence in Mexico

Author

Listed:
  • Hornung, Erik
  • Hidalgo, Eduardo
  • Selaya, Pablo

Abstract

We study how NAFTA changed the geography of violence in Mexico. We propose that open borders increased trafficking profits of Mexican cartels and resulted in violent competition among them. We test this hypothesis by comparing changes in drug-related homicides after NAFTA’s introduction in 1994 across municipalities with and without drug-trafficking routes. Routes are optimal paths connecting municipalities with a recent history of drug trafficking with U.S. ports of entry. On these routes, homicides increase by 27% relative to the pre-NAFTA mean. These results cannot be explained by changes in worker’s opportunity costs of using violence resulting from the trade shock.

Suggested Citation

  • Hornung, Erik & Hidalgo, Eduardo & Selaya, Pablo, 2022. "NAFTA and drug-related violence in Mexico," CEPR Discussion Papers 17608, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17608
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    Cited by:

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    2. 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).

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    Keywords

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    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • N76 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Latin America; Caribbean

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