Reducing Cartel Violence: The Mexican Dilemma Between Social and Security Spending

Rafael Prieto-Curiel, Dieter Grass, Stefan Wrzaczek, Gian Maria Campedelli, Gernot Tragler and Gustav Feichtinger

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Abstract: Organised crime in Mexico threatens societal stability and public safety, driving pervasive violence and economic disruption. Despite security investments and social programs designed in part to reduce involvement in crime, cartel power and violence continue to persist. This study evaluates existing policies and introduces a novel framework using optimal control theory to analyse cartel dynamics. Specifically, by modelling resource allocation between security measures and social programs, we identify optimal strategies to mitigate the impacts of cartels. Findings reveal that Mexico's largest cartel imposes an annual economic burden exceeding \text{US\$ } 19 billion, 2.5 times the government's investment in science and technology. We further demonstrate that current budget allocations between social and security programs are nearly optimal yet insufficient to reduce cartel violence significantly. In light of these findings, we demonstrate that achieving meaningful harm reduction would require a significantly larger budget and would take over a decade, even with increased funding.

Date: 2025-07
New Economics Papers: this item is included in nep-dev and nep-law
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