Evaluating the Effects of Nayib Bukele's Anti-Gang Policies on El Salvador's Socio-Economic Landscape

Henry J. Flowers and Amin Modhurima

No 361017, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: This study evaluates the socio-economic impacts of President Nayib Bukele’s anti-gang policies implemented in El Salvador from 2019 to 2023. Using the Synthetic Control Method (SCM), we assess the causal effects of these policies on four key outcomes: real GDP per capita, unemployment, government expenditure, and homicide rates. Our results indicate a significant reduction in the homicide rate, up to 56.8%, suggesting that Bukele’s intervention achieved its central security objective. Additionally, the unemployment rate fell by 4.6 percentage points compared to the synthetic control, indicating improved labor market outcomes likely driven by enhanced mobility and stability. In contrast, no statistically significant changes were observed in real GDP per capita and gross government expenditure, suggesting that security gains did not come at the cost of economic growth or fiscal sustainability. Placebo and permutation tests confirm the robustness of our findings. These results offer insight into the trade-offs and consequences of adopting firm-handed, militarized governance in response to gang violence. While Bukele’s policies remain controversial due to concerns over authoritarianism and human rights, the empirical evidence points to meaningful short-term gains in security and employment. The study highlights the robustness of SCM in evaluating non-randomized political interventions and provides evidence to guide policymakers in other developing nations facing similar challenges.

Keywords: International; Development (search for similar items in EconPapers)
Pages: 29
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:361017

DOI: 10.22004/ag.econ.361017

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