From Cocaine to Avocados: Criminal Market Expansion and Violence

• In Event: The Politics of Illicit Markets

Abstract

Criminal groups seek to capture markets for a wide variety of both legal and illegal commodities. For example, Mexican drug cartels’ expansion into the lime and avocado markets has garnered increased media attention, largely due to the diffusion of violence that accompanies this economic expansion. Yet, most of what we know about criminal groups’ economic and political actions comes from research specifically about markets for illegal narcotics. Criminal economic expansion has severe implications for violence, peace, and governance as it imposes high costs on those communities that operate in these markets, affecting their civil rights and their physical integrity. Under what conditions do criminal groups expand their activities to markets for different goods? In this paper, we focus on a key mechanism that influences criminal market expansion and resulting violence: rapid increases in the product value of agricultural markets. We argue that increases in agricultural production provide opportunities for criminal organizations to regulate supply, thus increasing prices and their profit. Criminal organizations capitalize on these opportunities by engaging in coercive violence against agricultural producers to secure territorial and economic control. To test this argument, we pair data on agricultural production and homicides from the World Bank with data on the presence and strength of organized crime from the World Economic Forum’s Global Competitiveness dataset from 2006 to 2015. We find that sharp increases in agricultural production in states with prevalent organized crime are associated with increases in homicide rates. To better illustrate the mechanism of local economic capture, we pair these cross-national data with a case study of criminal organizations in Mexico.

Authors

• Lucia Tiscornia, Centro de Investigacion y Docencia Economicas

• Chelsea L Estancona, University of South Carolina