[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/bos/iedwpr/dp-314.html
   My bibliography  Save this paper

Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War

Author

Listed:
  • Juan Camilo Castillo

    (Stanford University)

  • Daniel Mejia

    (Universidad de los Andes)

  • Pascual Restrepo

    (Boston University)

Abstract
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 Colombia—Mexico’s main cocaine supplier—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.

Suggested Citation

  • Juan Camilo Castillo & Daniel Mejia & Pascual Restrepo, 2018. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-314, Boston University - Department of Economics.
  • Handle: RePEc:bos:iedwpr:dp-314
    as

    Download full text from publisher

    File URL: http://www.bu.edu/econ/files/2019/05/cmr_scarcity_restat_final_45pages_short.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paolo Buonanno & Ruben Durante & Giovanni Prarolo & Paolo Vanin, 2015. "Poor Institutions, Rich Mines: Resource Curse in the Origins of the Sicilian Mafia," Economic Journal, Royal Economic Society, vol. 125(586), pages 175-202, August.
    2. Wooldridge, Jeffrey M., 1999. "Distribution-free estimation of some nonlinear panel data models," Journal of Econometrics, Elsevier, vol. 90(1), pages 77-97, May.
    3. Ariaster B. Chimeli & Rodrigo R. Soares, 2017. "The Use of Violence in Illegal Markets: Evidence from Mahogany Trade in the Brazilian Amazon," American Economic Journal: Applied Economics, American Economic Association, vol. 9(4), pages 30-57, October.
    4. Ernesto Dal Bó & Pedro Dal Bó, 2011. "Workers, Warriors, And Criminals: Social Conflict In General Equilibrium," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 646-677, August.
    5. Joshua D. Angrist & Adriana D. Kugler, 2008. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 191-215, May.
    6. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    7. Hirshleifer,Jack, 2001. "The Dark Side of the Force," Cambridge Books, Cambridge University Press, number 9780521009171, September.
    8. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(2), pages 238-249, April.
    9. Herschel I. Grossman, 2001. "The Creation of Effective Property Rights," American Economic Review, American Economic Association, vol. 91(2), pages 347-352, May.
    10. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    11. Mathieu Couttenier & Pauline Grosjean & Marc Sangnier, 2017. "The Wild West IS Wild: The Homicide Resource Curse," Journal of the European Economic Association, European Economic Association, vol. 15(3), pages 558-585.
    12. Oeindrila Dube & Omar García-Ponce & Kevin Thom, 2016. "From Maize to Haze: Agricultural Shocks and the Growth of the Mexican Drug Sector," Journal of the European Economic Association, European Economic Association, vol. 14(5), pages 1181-1224.
    13. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    14. Melissa Dell, 2015. "Trafficking Networks and the Mexican Drug War," American Economic Review, American Economic Association, vol. 105(6), pages 1738-1779, June.
    15. Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 401-411, July.
    16. Jo Thori Lind & Karl Ove Moene & Fredik Willumsen, 2014. "Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 949-966, December.
    17. Jeremy Arkes & Rosalie Liccardo Pacula & Susan M. Paddock & Jonathan P. Caulkins & Peter Reuter, 2008. "Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets," NBER Working Papers 14224, National Bureau of Economic Research, Inc.
    18. Silverman, Lester P. & Spruill, Nancy L., 1977. "Urban crime and the price of heroin," Journal of Urban Economics, Elsevier, vol. 4(1), pages 80-103, January.
    19. Markus Bruckner & Antonio Ciccone, 2010. "International Commodities Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Working Papers 1008, BBVA Bank, Economic Research Department.
    20. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    21. Camilo García‐Jimeno, 2016. "The Political Economy of Moral Conflict: An Empirical Study of Learning and Law Enforcement Under Prohibition," Econometrica, Econometric Society, vol. 84, pages 511-570, March.
    22. Nisbet, Charles T & Vakil, Firouz, 1972. "Some Estimates of Price and Expenditure Elasticities of Demand for Marijuana Among U.C.L.A. Students," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 473-475, November.
    23. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1384-1421.
    24. Markus Brückner & Antonio Ciccone, 2010. "International Commodity Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Economic Journal, Royal Economic Society, vol. 120(544), pages 519-534, May.
    25. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-938, July.
    26. Wasserman, Jeffrey & Manning, Willard G. & Newhouse, Joseph P. & Winkler, John D., 1991. "The effects of excise taxes and regulations on cigarette smoking," Journal of Health Economics, Elsevier, vol. 10(1), pages 43-64, May.
    27. Jack Hirshleifer, 1989. "Conflict and rent-seeking success functions: Ratio vs. difference models of relative success," Public Choice, Springer, vol. 63(2), pages 101-112, November.
    28. Rotemberg, Julio J & Saloner, Garth, 1986. "A Supergame-Theoretic Model of Price Wars during Booms," American Economic Review, American Economic Association, vol. 76(3), pages 390-407, June.
    29. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
    30. James Roumasset & John Hadreas, 1977. "Addicts, Fences, and the Market for Stolen Goods," Public Finance Review, , vol. 5(2), pages 247-272, April.
    31. Oeindrila Dube & Omar García-Ponce & Kevin Thom, 2016. "From Maize To Haze: Agricultural Shocks And The Growth Of The Mexican Drug Sector," Journal of the European Economic Association, European Economic Association, vol. 14(5), pages 1181-1224, October.
    32. Gary S. Becker & Kevin M. Murphy & Michael Grossman, 2006. "The Market for Illegal Goods: The Case of Drugs," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 38-60, February.
    33. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    34. Gabriela Calderón & Gustavo Robles & Alberto Díaz-Cayeros & Beatriz Magaloni, 2015. "The Beheading of Criminal Organizations and the Dynamics of Violence in Mexico," Journal of Conflict Resolution, Peace Science Society (International), vol. 59(8), pages 1455-1485, December.
    35. Daron Acemoglu & James A. Robinson & Rafael J. Santos, 2013. "The Monopoly Of Violence: Evidence From Colombia," Journal of the European Economic Association, European Economic Association, vol. 11, pages 5-44, January.
    36. Emily G. Owens, 2014. "The American Temperance Movement and Market-Based Violence," American Law and Economics Review, American Law and Economics Association, vol. 16(2), pages 433-472.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Juan Camilo Castillo, Daniel Mejia, and Pascual Restrepo, 2014. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War - Working Paper 356," Working Papers 356, Center for Global Development.
    2. Daniele, Gianmarco & Le Moglie, Marco & Masera, Federico, 2023. "Pains, guns and moves: The effect of the U.S. opioid epidemic on Mexican migration," Journal of Development Economics, Elsevier, vol. 160(C).
    3. Gehring, Kai & Langlotz, Sarah & Kienberger, Stefan, 2018. "Stimulant or depressant? Resource-related income shocks and conflict," Working Papers 0652, University of Heidelberg, Department of Economics.
    4. Ceren Baysan & Marshall Burke & Felipe González & Solomon Hsiang & Edward Miguel, 2018. "Economic and Non-Economic Factors in Violence: Evidence from Organized Crime, Suicides and Climate in Mexico," NBER Working Papers 24897, National Bureau of Economic Research, Inc.
    5. Baysan, Ceren & Burke, Marshall & González, Felipe & Hsiang, Solomon & Miguel, Edward, 2019. "Non-economic factors in violence: Evidence from organized crime, suicides and climate in Mexico," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 434-452.
    6. Stoop, Nik & Verpoorten, Marijke & van der Windt, Peter, 2019. "Artisanal or industrial conflict minerals? Evidence from Eastern Congo," World Development, Elsevier, vol. 122(C), pages 660-674.
    7. Hornung, Erik & Hidalgo, Eduardo & Selaya, Pablo, 2022. "NAFTA and drug-related violence in Mexico," CEPR Discussion Papers 17608, C.E.P.R. Discussion Papers.
    8. Arinze Nwokolo, 2018. "Oil Price Shocks and Civil Conflict: Evidence from Nigeria," HiCN Working Papers 274, Households in Conflict Network.
    9. Camille Laville, 2018. "The econometrical causal analysis of internal conflicts: The evolutions of a growing literature [L’analyse économétrique des conflits internes par l’approche causale : les évolutions d’une littérat," Working Papers hal-01940461, HAL.
    10. Alex Dickson & Ian A MacKenzie & Petros G Sekeris, 2018. "The role of markets and preferences on resource conflicts," Working Papers 1819, University of Strathclyde Business School, Department of Economics.
    11. Achim Ahrens, 2015. "Civil conflicts in Africa: Climate, economic shocks, nighttime lights and spill-over effects," SEEC Discussion Papers 1501, Spatial Economics and Econometrics Centre, Heriot Watt University.
    12. Camille Laville, 2018. "The econometrical causal analysis of internal conflicts: The evolutions of a growing literature [L’analyse économétrique des conflits internes par l’approche causale : les évolutions d’une littérat," CERDI Working papers hal-01940461, HAL.
    13. Martínez, Luis R., 2017. "Transnational insurgents: Evidence from Colombia's FARC at the border with Chávez's Venezuela," Journal of Development Economics, Elsevier, vol. 126(C), pages 138-153.
    14. Massimiliano Cal� & Sami H. Miaari, 2014. "Trade, employment and conflict: Evidence from the Second Intifada," HiCN Working Papers 186, Households in Conflict Network.
    15. Francesco Amodio & Leonardo Baccini & Michele Di Maio, 2021. "Security, Trade, and Political Violence," Journal of the European Economic Association, European Economic Association, vol. 19(1), pages 1-37.
    16. Axbard, Sebastian & Benshaul-Tolonen, Anja & Poulsen, Jonas, 2021. "Natural resource wealth and crime: The role of international price shocks and public policy," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    17. Verme, Paolo & Schuettler, Kirsten, 2021. "The impact of forced displacement on host communities: A review of the empirical literature in economics," Journal of Development Economics, Elsevier, vol. 150(C).
    18. Eoin McGuirk & Marshall Burke, 2020. "The Economic Origins of Conflict in Africa," Journal of Political Economy, University of Chicago Press, vol. 128(10), pages 3940-3997.
    19. repec:oxf:wpaper:oxcarre-research-paper-131 is not listed on IDEAS
    20. Dominic Rohner & Mathias Thoenig, 2021. "The Elusive Peace Dividend of Development Policy: From War Traps to Macro Complementarities," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 111-131, August.
    21. James Fenske & Namrata Kala, 2012. "Climate, ecosystem resilience and the slave trade," CSAE Working Paper Series 2012-23, Centre for the Study of African Economies, University of Oxford.

    More about this item

    Keywords

    War on Drugs; Violence; Illegal Markets; Mexico; Cocaine Trade;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bos:iedwpr:dp-314. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Program Coordinator (email available below). General contact details of provider: https://edirc.repec.org/data/decbuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.