Abstract
AbstractMilitary crackdowns often disrupt economic development by exacerbating violence. This paper examines the case of the Mexican Drug War, employing synthetic control methods. To prove causality, I use variation on statewide military operations, as well as the rollout of the war. Findings indicate a decrease in GDP per capita equal to 0.5%, in states with military operations. Determinants by which the Mexican Drug War hampered economic development include a proportional reduction in consumption per capita, and a decline in productive investment of at least 0.3%, driven by a drop of 3.2% in commercial credit granted to businesses.
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