Drug Cartels’ Violence in New and Traditional Illegal Markets

Gianmarco Daniele, Bocconi University

Research Grant, 2019

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This document summarizes the main findings of the two papers developed within this project: “Oil Thefts and the Mexican War on Drugs” and “Pains, Guns and Moves: The Effect of the US Opioid Epidemic on Mexican Migration.”

“Oil Thefts and the Mexican War on Drugs”

In this paper, we show that the “War on Drugs” launched by Mexican President Felipe Calderón in 2007 pushed drug cartels into a new illegal business, namely large-scale oil theft. Municipalities in which the presidential candidate barely won 2007–2009 local elections exhibit a larger increase in illegal oil taps over the following years, compared to municipalities in which the presidential candidate barely lost the elections. Challenger cartels in the drug market anticipated incumbent drug cartels in entering the new illegal business, analogously to what is typically observed in legal markets. Since challengers and incumbents specialized in different criminal sectors, the expansion of challengers did not increase violence in municipalities crossed by oil pipelines. At the same time, such municipalities witnessed a deterioration of socio-economic conditions as measured by infant mortality and school dropout rates.

Violence and conflicts increased in Mexican municipalities suitable for opium production as they became highly valuable to drug cartels. People migrated out of these municipalities to escape this violence, mostly to Mexican areas close to the US border and into the US.

Pains, Guns and Moves: The Effect of the US Opioid Epidemic on Mexican Migration

The opioid epidemic and migration along the US–Mexico border are two of the most–debated topics in US politics. We show how these two topics are interlinked: the US opioid epidemic generated large Mexican migration flows.

In 2010, a series of reforms to the US healthcare system resulted in a shift in demand from legal opiates to heroin. This demand shock had considerable effects on Mexico, the main supplier of heroin consumed in the US. Violence and conflicts increased in Mexican municipalities suitable for opium production as they became highly valuable to drug cartels. People migrated out of these municipalities to escape this violence, mostly to Mexican areas close to the US border and into the US.