Cultivating Violence: Trade Liberalization, Illicit Labor, and the Mexican Drug Trade

Abstract

ABSTRACTThis article asks whether economic liberalization, under certain institutional conditions, is indirectly related to drug violence. Focusing on Mexico’s drug trade, where violence was historically limited by politicoinstitutional arrangements, this study examines how trade liberalization shapes social exclusion in key trafficking regions and, in turn, shapes the industry. It argues that the change in development strategy has increased the flow of workers into the drug trade by reconfiguring the agricultural sector in regions where drugs are produced while failing to absorb surplus labor in manufacturing centers containing key smuggling routes. Through both mechanisms, workers enter an illicit market with new institutional settings that allow for fierce competition and the use of violence. Using panel data on drug violence from 2007 to 2011, the study finds that exposure to trade is associated with violence in both drug-producing and -smuggling regions, but with a more sizable effect in the former.