Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War
Juan Castillo (),
Daniel Mejia () and
Pascual Restrepo ()
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Juan Castillo: Stanford University
Daniel Mejia: Universidad de los Andes
No dp-314, Boston University - Department of Economics - The Institute for Economic Development Working Papers Series from Boston University - Department of Economics
This paper asks whether scarcity increases violence in markets that lack a centralized authority. We construct a model in which, by raising prices, scarcity fosters violence. Guided by our model, we examine the link between scarcity and violence in the Mexican cocaine trade. At a monthly frequency, scarcity created by cocaine seizures in Colombiaâ€”Mexicoâ€™s main cocaine supplierâ€”increases violence in Mexico. The effects are larger in municipalities near the US, with multiple cartels, and with strong PAN support. Between 2006 and 2009 the decline in cocaine supply from Colombia could account for 10%-14% of the increase in violence in Mexico.
Keywords: War on Drugs; Violence; Illegal Markets; Mexico; Cocaine Trade (search for similar items in EconPapers)
JEL-codes: D74 K42 (search for similar items in EconPapers)
Pages: 46 pages
New Economics Papers: this item is included in nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:bos:iedwpr:dp-314
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