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

Juan Camilo Castillo, Daniel Mejia, Pascual Restrepo
2014 Social Science Research Network  
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
more » ... ng 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.
doi:10.2139/ssrn.2409268 fatcat:eouwgsuemvhxpic3gfoton4zv4