Description:

Speaker: Sergio Lopez-Araiza

Title: "US Border Wall and Organized Crime in Mexico"

Abstract: Violence related to drug trafficking organizations (DTOs) has dramatically escalated in Mexico since 2007. However, beyond the increase in the nation-wide homicide rate lies a huge time and spatial variation across Mexico's 2,456 municipalities. One potential source of such heterogeneity is how valuable it is for DTOs to control a municipality for drug trafficking purposes.  Using the expansion of the US-Mexico border wall that resulted from the Secure Fence Act of 2006 and leveraging the fact that it made trafficking drugs into the US more difficult, I study how changes in the value of the municipalities shifted violence in Mexico. Using a TWFE estimator, I observe that municipalities whose closest border municipality get a wall segment see a decrease of 0.35 (44% with respect to the mean) in their homicide rate. The effect is concentrated in municipalities with DTO presence by 2005 and it seems to be present for at least 5 years.