NAFTA and drug-related violence in Mexico

Eduardo Hidalgo, Erik Hornung and Pablo Selaya
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Eduardo Hidalgo: University of Cologne,

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: We study how NAFTA changed the geography of violence in Mexico. We propose that this open border policy increased traffcking profits of Mexican cartels, resulting in violent competition among them. We test this hypothesis by comparing changes in drug-related homicides after NAFTA’s introduction in 1994 across municipalities with and without drug-traffcking routes. Routes are predicted least cost paths connecting municipalities with a recent history of detected drug traffcking with U.S. land ports of entry. On these routes, homicides increase by 2.3 per 100,000 inhabitants, which is equivalent to 27% of the pre-NAFTA mean. These results cannot be explained by changes in worker’s opportunity costs of using violence resulting from the trade shock. JEL Codes: K42 ; F14 ; D74 ; O54

Keywords: Violence; NAFTA; Free Trade; Mexico; Illegal Drug Traffcking; Conflict (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dev, nep-his and nep-int
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https://warwick.ac.uk/fac/soc/economics/research/c ... tions/wp640.2022.pdf

Related works:
Working Paper: NAFTA and Drug-Related Violence in Mexico (2022)
Working Paper: NAFTA and Drug-Related Violence in Mexico (2022)
Working Paper: NAFTA and drug-related violence in Mexico (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:640

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