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Existing work on state responses to the rising level of transnational crime in Central America focus mainly on legal responses to transnational crimes and generally neglect to point to government’s state building efforts. By providing evidence from Honduras, this paper makes the argument that governments are engaging in state building through the allocation and titling of ethnic communal land regimes to create powerful incentives for individuals to embrace state-led anti-narcotic strategies. In Honduras, where transnational criminal organizations threaten the state, the government designs and allocates land to ethnic communities as a tool to make inroads against drug traffickers among the local population. Even in a hard-test region of remote and inaccessible land, the government’s response to rising levels of drug trafficking is state building by titling ethnic lands. The findings suggest that political science needs to take seriously the role of property institutions in thwarting the influence and power of transnational criminal organizations in Central America.