Working Paper: CEPR ID: DP16914
Authors: Giacomo Battiston; Gianmarco Daniele; Marco Le Moglie; Paolo Pinotti
Abstract: We show that the War on Drugs launched by the Mexican President Felipe Calderón in 2007 pushed drug cartels into large-scale oil thefts. Municipalities that the presidential candidate's party barely won at the local elections in 2007-2009 exhibit a larger increase in illegal oil taps over the following years, compared to municipalities in which the presidential candidate's party barely lost the elections. Challenger cartels in the drug market leapfrog incumbent drug cartels when entering the new illegal activity, analogous to what is typically observed in legal markets. Since challengers and incumbents specialize in different criminal sectors, the expansion of challengers does not increase violence in municipalities traversed by oil pipelines. At the same time, the municipalities traversed by a pipeline witness a decrease in schooling rates.
Keywords: organized crime; war on drugs; oil thefts; leapfrogging
JEL Codes: K42; L20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| entry of challenger cartels (L12) | specialization into oil theft market (L71) |
| specialization into oil theft market (L71) | reduce competition and violence in drug market (L12) |
| increase in cartel presence due to oil theft (L71) | no increase in homicide rates (K14) |
| increase in cartel presence due to oil theft (L71) | 10% increase in children under 15 not in formal education (I21) |
| war on drugs (H56) | increase in illegal oil taps (L71) |
| PAN party narrow win (D79) | increase in illegal oil taps (L71) |