The good, the bad and the ugly: the socioeconomic impact of drug cartels and their violence

Roxana Gutiérrez-Romero and Mónica Oviedo

Journal of Economic Geography, 2018, vol. 18, issue 6, 1315-1338

Abstract: This article assesses the impact of drug cartels in Mexico, a country that has witnessed an unprecedented expansion of cartels and wave of drug-related violence since mid-2000. Using the difference-in-difference kernel matching method, the article finds that the areas most plagued by drug-related violence suffered a steep decline in production, profits, salaries, the number of businesses and workers in manufacturing. Unemployment and poverty also rose in the most violent areas. The few areas where cartels managed to work free of drug-related killings failed to see a change in poverty or unemployment, contradicting anecdotal storytelling of cartels benefiting local economies.

Keywords: Drug cartels; violence; impact evaluation; poverty; local economy; kernel matching (search for similar items in EconPapers)
JEL-codes: K49 O12 O16 O17 R59 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (8)

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