The Economic Consequences of the Mexican Drug War

Balmori de la Miyar Jose Roberto ()
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Balmori de la Miyar Jose Roberto: Universidad Anahuac Mexico – Business School, Av. de las Torres No. 131 Olivar de los Padres, Mexico City 01780, Mexico
Authors registered in the RePEc Author Service: Jose Roberto Balmori-de-la-Miyar

Peace Economics, Peace Science, and Public Policy, 2016, vol. 22, issue 3, 213-246

Abstract: Military crackdowns often disrupt economic development by exacerbating violence. This paper examines the case of the Mexican Drug War, employing synthetic control methods. To prove causality, I use variation on statewide military operations, as well as the rollout of the war. Findings indicate a decrease in GDP per capita equal to 0.5%, in states with military operations. Determinants by which the Mexican Drug War hampered economic development include a proportional reduction in consumption per capita, and a decline in productive investment of at least 0.3%, driven by a drop of 3.2% in commercial credit granted to businesses.

Keywords: war on drugs; Mexico; economic growth; organized crime; synthetic control methods (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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DOI: 10.1515/peps-2016-0014

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