NAFTA and Drug-Related Violence in Mexico

Eduardo Hidalgo, Erik Hornung and Pablo Selaya

No 9981, CESifo Working Paper Series from CESifo

Abstract: We study how NAFTA changed the geography of violence in Mexico. We propose that this open border policy increased trafficking profits of Mexican cartels, resulting 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 predicted least cost paths connecting municipalities with a recent history of detected drug trafficking with U.S. land ports of entry. On these routes, homicides increase by 2.3 per 100,000 inhabitants, which is equivalent to 27% of the pre-NAFTA mean. These results cannot be explained by changes in worker’s opportunity costs of using violence resulting from the trade shock.

Keywords: violence; NAFTA; free trade; Mexico; illegal drug trafficking; conflict (search for similar items in EconPapers)
JEL-codes: D74 F14 K42 O54 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dev, nep-int and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: NAFTA and Drug-Related Violence in Mexico (2022)
Working Paper: NAFTA and drug-related violence in Mexico (2022)
Working Paper: NAFTA and drug-related violence in Mexico (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9981

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