This paper provides an account of the strategies of extortion and co-optation used by drug trafficking organizations (DTOs) toward civil society in Mexico. Drawing on the civil war and mafia crime literatures, our theoretical approach focuses on levels of territorial contestation among armed actors, as well as state capture by DTOs, to explain variation in co-opting or coercing civil society. Through the use of list experiments in a nationally representative survey, the paper measures extortion and assistance by DTOs in Mexico. We find that the effect of territorial contestation among rival DTOs has two effects. The effect on extortion is non-linear: highly contested places and non-contested places, controlled by a single DTO, show significantly less extortion than moderately contested places. The effect on assistance is negative: DTOs provide assistance mostly in non-contested places. Additionally, using areas of governance by the former ruling party, the Partido Revolucionario Institucional (PRI), as a proxy for state capture by DTOs, we find that both DTO and police extortion is higher in municipalities where the state has been captured. These results suggest that territorial contestation and state capture are important in determining the choice of tactics toward civil society during drug wars.

Traditional community rules are formally recognized in multiple constitutions across Latin America. Scholars debate the extent to which these practices conform to broader principles of gender equality. A unique institutional feature in the impoverished state of Oaxaca, Mexico, divides municipalities into traditional and party-based governance. We exploit this feature with original survey data and find that rates of female participation in traditional communities are not different when compared to non-traditional ones. We also conduct a survey experiment to explore how perceptions about female leadership change with factual information about female mayors. We find the strongest demonstration effect on women recipient of the conditional cash transfer program Oportunidades. Our evidence suggests overall that traditional governance is not a relevant dimension to understand female disempowerment, and that entrenched discriminatory practices against women (which exist but are not inherent to traditional rule) are sensitive to community bargains and well-designed policy.

When Mexican President Felipe Caldrón took office in December 2006 he declared a war on the nation’s drug traffic organizations (Ríos and Shirk, 2011). Violence escalated as criminal organizations became increasingly fragmented and disputed their territories (Killebrew and Bernal, 2010; Beittel, 2011). The main strategy followed by the federal government involved capturing leaders and lieutenants of criminal organizations (Calderón et al. forthcoming). This seemed to provoke even more violence, by making the competition over territorial control fiercer and providing incentives for many gangs to make extortion and protection fees (derecho de piso) an additional source of revenue (Guerrero-Gutiérrez, 2010). Given the absence of legal (and peaceful) rules and enforcement mechanisms for competitors in the illegal drug market, disagreements were usually solved violently. Under the pressure of the crackdown by the federal police, the navy and the army, contracts among criminal gangs were often disrupted, leading to even more violence.1 Competition over the strategic routes towards the market in the United States was settled by literally eliminating rivals (Dell, 2012).

This chapter explores the connection between police distrust, corruption and extortion. Despite the difficulty in measuring these phenomena through conventional public opinion polls and citizen or firm level surveys, much can be learned from the variation across geographic units in reported victimization and corruption. We use a list experiment collected through the Survey on Public Safety and Governance in Mexico (SPSGM), to study the practices of extortion by both police forces and criminal organizations.4 Using a Bayesian spatial estimation method, we provide a mapping of the geographic distribution of police extortion.

Abstract:

Why have militarized interventions to curtail violence by drug cartels had wildly divergent results? In the past six years, state crackdowns drove a nine-fold increase in cartel-state violence in Mexico, versus a two-thirds decrease in Brazil. Prevailing analyses of drug wars as a criminal subtype of insurgency provide little traction, because they elide differences in rebels’ and cartels’ aims. Cartels, I argue, fight states not to conquer territory or political control, but to coerce state actors and influence policy outcomes. The empirically predominant channel is violent corruption— threatening enforcers while negotiating bribes. A formal model reveals that greater state repression raises bribe prices, leading cartels to fight back whenever (a) corruption is sufficiently rampant, and (b) repression is insufficiently conditional on cartels’ use of violence. Variation in conditionality helps explain observed outcomes: switching to conditional repression pushed Brazilian cartels into nonviolent strategies, while Mexico’s war “without distinctions” inadvertently made fighting advantageous.

The levels of violence in Mexico have dramatically increased in the last few years due to structural changes in the drug trafficking business. The increase in the number of drug trafficking organizations (DTOs) fighting over the control of territory and trafficking routes has resulted in a substantial increase in the rates of homicides and other crimes. This study evaluates the economic costs of drug-related violence. We propose electricity consumption as an indicator of the level of municipal economic activity and use two different empirical strategies to test this. To estimate the marginal effects of violence, we utilize an instrumental variable regression created by Mejía and Castillo (2012) based on historical seizures of cocaine in Columbia interacted with the distance of the Mexican border towns to the United States. We find that marginal increases of violence have negative effects on labor participation and the proportion of unemployed in an area. The marginal effect of the increase in homicides is substantive for earned income and the proportion of business owners, but not for energy consumption. We also employ the methodology of synthetic controls to evaluate the effect that inter-narco wars have on local economies. These wars in general begin with a wave of executions between rival criminal organizations and are accompanied by the deterioration of order and a significant increase in extortion, kidnappings, robberies, murders, and threats affecting the general population. To evaluate the effect that these wars between different drug trafficking organizations have on economic performance, we define the beginning of a conflict as the moment when we observe an increase from historical violence rates at the municipal level beyond a certain threshold, and construct counterfactual scenarios as a weighted average from optimal control units. The analysis indicates that the drug wars in those municipalities that saw dramatic increases in violence between 2006 and 2010 significantly reduced their energy consumption in the years after the change occurred.