Blood Avocados: Cartel Violence Over Licit Industries in Mexico

Megan Erickson and Owen, Lucas. "Blood Avocados: Cartel Violence Over Licit Industries in Mexico." University of Washington Political Economy Forum, 2020. 

Blood Avocados:Cartel Violence Over Licit Industries in Mexico

Megan Erickson & Lucas Owen

June 9th, 2020

Abstract

Has  growing  demand  for  licit  goods  caused  an  increase  in  violence  among  Mexican criminal  organizations?   We  theorize  that  cartels  enter  licit  markets  to  supplement and diversify revenues from the drug trade,  and that the incentive to do so changes with  revenues  in  licit  markets.   Given  their  comparative  advantages  in  agricultural production and violence, we expect cartels to react to increasing demand in agricultural markets by fighting to maximize territorial control and monopolize production. Using adifference-in-differences design, we test the hypothesis that a positive shock in demandfor  avocados  from  municipalities  in  the  states  of  Michoacan  and  Jalisco  led  to  an increase in cartel violence.  We ultimately find the opposite of what we expect.  The enactment of a U.S. phytosanitary policy in June of 2016, which extended U.S. demand for avocados to municipalities formerly unable to export to the United States, led to asignificant decrease in cartel homicides compared to municipalities that were unaffectedby this policy.  Given that cartels were present in most areas of Michoacan and Jalisco before the policy, we interpret this result as coming from cartels anticipating increased territorial contestation.  Since cartels expect others to challenge their territory,  they bolster their defenses, reducing incentives for territorial contestation.

https://cpb-us-e1.wpmucdn.com/sites.uw.edu/dist/0/7926/files/2020/08/Erickson__Owen_2020_06_092.pdf

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