Motivation

1. Is the fight against Mexican drug cartels beneficial to publicsecurity?Nils-Hendrik KLANNUniversity of Göttingen & University of Heidelberg New Directions in Welfare 2011 Congress

2. Motivation “We have 18 months and if we do not produce a tangible success that is recognizable to the Mexican people, it will be difficult to sustain this confrontation into the next administration.” Gerónimo Gutiérrez, Deputy Secretary for Domestic Security (Diplomatic cable from 2009; Wikileaks) New Directions in Welfare 2011 Congress

3. Motivation The ‘War on Drugs’ has become a global phenomenon as governments in many countries seek to fight the activities of international drug cartels. The growing sophistication of drug gangs as well as their ever- increasing affinity to violence against opponents pose a direct challenge to the authority of governments. In many countries, society is caught in the middle between opposing forces in an increasingly brutal conflict between gangs and security forces. New Directions in Welfare 2011 Congress

4. Motivation Acting both as a producer and transport hub for drugs, Mexico has become the center stage for an extremely violent conflict between gangs competing to deliver drugs to the US market. Since 2006, the Mexican government has significantly stepped up its initiative against drug cartels, relying on police as well as 35,000 soldiers to fight Mexico’s drug cartels. With regards to tackling the activities of Mexico’s drug cartels, the government’s anti-drug initiative is often called into question. New Directions in Welfare 2011 Congress

5. Motivation On the other hand, no empirical analysis exists to date focusing on the broader implications of Mexico’s drug war for society. Objective of this paper Investigate the effect of Mexico’s anti-drug initiative on the prevalence of non-drug offences such as property crime, assault, rape and murder at the district level. New Directions in Welfare 2011 Congress

6. Outline • Introduction • Literature Overview • Research Outline • Empirical Results • Conclusion New Directions in Welfare 2011 Congress

7. 1. Introduction With the ‘War on Drugs’ going on for several years and its effect on cartel activities dubious at best, which effects will this initiative have on the Mexican society? This paper focuses on the prevalence of non-drug related offences in the approximately 2500 municipal districts in the time period from 1998 until 2008 to assess whether or not the intensity of anti-drug efforts impacts on the prevalence of non-drug crime (NDC). New Directions in Welfare 2011 Congress

8. 2. Literature Overview Prior research on the effect of drug enforcement on other forms of crime focus provide contrasting predictions: Theory 1 Intensified drug enforcement increases non-drug crime Welfare of society is reduced as the anti-drug initiative implies negative externalities in the form of rising crime rates. Relies on seminal contribution by Becker (1986) and Ehrlich (1973) predicting the likelihood of criminal activity in the light of expected gains and costs: New Directions in Welfare 2011 Congress

9. 2. Literature Overview Several sources such as Sollars, Benson et al. (1994) Benson, Kim et al. (1994), Benson, Rasmussen et al. (1998) Benson, Leburn et al. (2001) analyze the implications of a marked concentration of police forces to battle drug offenders in 67 Florida counties around the 80s and 90s on non-drug crime. Also, Resignato (2000) and Shepard and Blackley (2005) conduct a similar investigation focusing on New York State. Key finding the concentration of finite law enforcement resources on one predominant type of crime increasesall other types of crime (crowding out effect) New Directions in Welfare 2011 Congress

10. 2. Literature Overview An alternative explanation of this positive relationship is discussed in Miron (1999) and with an empirical analysis in Miron (2001). Here, violence is a systemic feature of black markets, in which participants are unable to resort to legal institutions such as the police or courts to resolve disputes or enforce their property rights. This process is exacerbated as enforcement intensifies. Key finding Intensifying enforcement efforts increases the potential for violent turf wars. Classic example: gang crime in the ambit of alcohol prohibition in the United States. (e.g., Asbridge and Weerasinghe (2009)) New Directions in Welfare 2011 Congress

11. 2. Literature Overview Theory 2 Intensified drug enforcement reduces non-drug crime Contrasting opinion see the potential for complementarity between the objectives to fight DC and NDC offenders. In an ideal case, stepping up drug enforcement not only reduces drug offences but beyond that yields additional gains as the measure leads to a simultaneous reduction of non-drug offences e.g., robbery, assault and kidnapping. New Directions in Welfare 2011 Congress

12. 2. Literature Overview Analyzing US crime and incarceration data for the time period of 1983 until 1996 Kuziemko and Levitt (2004) find evidence that stricter punishment of drug offences yields a twofold effect: 1. longer incarceration of drug offenders impacts negatively on the duration served by NDC felons BUT counter to the predictions of the aforementioned Becker framework has no proliferating effect on NDC crime: 2. significant negative relationship between the incarceration of drug offenders and non-drug crime: New Directions in Welfare 2011 Congress

13. 2. Literature Overview Key finding Incarcerating drug offenders indirectly helps to reduce non-drug crime as drug offenders dedicate a significant share of their activities towards offences such as assault and murder. In line with this, Levitt and Venkatesh (2000) which investigate the daily routine and financials of a Chicago drug gang finds that about one fourth of a gang member’s time is dedicated to violent crime: Shipley (1989) finds similar trends analyzing offences committed by incarcerated drug offenders: New Directions in Welfare 2011 Congress

14. 2. Literature Overview Summary of the two strands of literature NDC increase Limited Police resources Crowding out effects Incarcerating drug traffickers NDC decrease positive secondary effects New Directions in Welfare 2011 Congress

15. 3. Research Outline and Methodology New Directions in Welfare 2011 Congress

16. 3. Research Outline and Methodology Analysis of district-level data from approx. 2500 municipal districts, spread out over 32 federal states over the time period of 1998-2008; running the following empirical model: Dependent variable NDC log of non-drug crime incidents in a district (5 indicators) Source: Statistical Yearbooks from 32 federal states; National Statistics Institute New Directions in Welfare 2011 Congress

17. 3. Research Outline and Methodology Independent Variables DE share of drug arrests over all DENS districtpopulation per km2 arrests in a district Source: Authors calculation based on surface data from Source: Statistical Yearbooks from 32 states; the Mexican Geographic Service Mexican National Statistics Institute (INEGI) POP log district population URATE district unemployment rate Source: Natl. Institute for Federalism and Municipal Development Source: Secretary for Employment and Social Security (STPS) HIGHW Highway Dummy CDET deterrence arrests/offences Source: Author’s calculation Source: Authors calculation based on Statistical Yearbooks from 32 federal states; National Statistics Institute Source: Secretary for Employment and Social Security New Directions in Welfare 2011 Congress

18. 3. Research Outline and Methodology Offences implemented as depended variable include - Robbery - Assault - Rape - Murder - Gang murder* *Data on gang murder is provided by the Mexican Interior Ministry from the year 2006 onwards. Victims were categorized as gang victims based on the circumstances of their death, e.g., the use of large caliber weapons, signs of torture New Directions in Welfare 2011 Congress

19. 4 Empirical Results Regression Framework Ordinary Least Squares (baseline) FE (district fixed effects) Negative Binomial (count data) GMM (endogeneity) Robustness checks carried out in the course of regressions: Exclusion of each federal state and year New Directions in Welfare 2011 Congress

20. 4. Empirical Results New Directions in Welfare 2011 Congress

21. 4. Empirical Results New Directions in Welfare 2011 Congress

22. 4. Empirical Results New Directions in Welfare 2011 Congress

23. . 4. Empirical Results New Directions in Welfare 2011 Congress

24. 5. Conclusion Regarding the effect of drug enforcement in general: A greater share of arrests among all arrests seems to reduce the Prevalence of most NDC offences at the district level. Some indication exists regarding the expected positive relationship between drug enforcement and gang murder – results should be Interpreted with caution however, given the short time span of the Data. New Directions in Welfare 2011 Congress

25. 5. Conclusion Regarding the control variables: In line with expectations, population yields a positive effect on the number of offences. Unemployment has a significant effect on crime - however no singular relationship can be derived from the results. Deterrence measures show the expected negative effect on all types of crime except gang murder. New Directions in Welfare 2011 Congress

26. 5. Conclusion Thank you New Directions in Welfare 2011 Congress