Stewart Hundley, Ian Tunnell, and Mackenzie Keck

SIS 310

Professor Jensen

30 April 2015

Drugs and Systemic Violence

Introduction

Since the late 2000’s the drug war in Mexico has steadily become worse, and recent news of

heightened kidnappings and rampant drug related violence draws serious questions to the source of

such violence. Such violence comes at a time when marijuana legalization efforts in the U.S. are fueled,

at least by some, with the intent to undercut the black market which relies to a great extent on drugs

trafficked from Mexico. The link between wholesale drug price and systemic violence in Mexico provides

interesting questions not only about the strength of such a link, but of how we enforce domestic and

foreign drug control policies. This research aims to explore the links between the wholesale price of

drugs (in this case cocaine) and the amount of systemic violence in Mexico.

Mexico remains an incredible area of study for this topic for a number of different reasons. In 2010,

90% of all cocaine entering the United States came through Mexico or its territorial waters. This fact

works in conjunction with a number of other factors which support Mexico’s position as a prime

trafficking location, factors which include issues with government corruption, poverty, and the fact that

the Andean region in South America remains the world’s sole source region for coca and cocaine. Due to

these numerous factors Mexico becomes the spotlight for cocaine trafficking. Unlike methamphetamine

or marijuana which can be produced or grown, respectively, anywhere along trafficking routes or

throughout Mexico, cocaine remains a product which relies on Mexican drug cartels to receive cocaine

from South American traffickers and work to move it into the United States for wholesale transaction.

Additionally, cocaine makes up the largest portion of the profits received due to drug trafficking by the

cartels in question. It is for these reasons that this paper will focus on the trafficking of cocaine as an

illicit substance and Mexico as the trafficking location.

Hypothesis

Our hypothesis is that drug prices and systemic violence are inversely related. We expect to find that a

decrease in drug cartel profits will yield increasingly violent behavior. As drug producers lose profit

margins, they will become more violent and will take more risks in confronting authorities, defending or

maintaining specific trafficking routes, and other given risk seeking behaviors.

Independent Variable: Wholesale cocaine price (kg) triannually (APR, AUG, DEC)

Dependent Variable: Drug trafficking related homicides triannually (APR, AUG, DEC)

Methodology

    We will use a regression analysis to explore the relationship between drug prices and systemic

violence. We will represent our findings using geographic information systems, utilizing data sets on

wholesale drug prices triannually from 2007-2010 reaping our wholesale cocaine price data from

academics who have utilized open-source methods of information. For our dependent variable we will

analyze academics who have aggregated drug related deaths using open source methods.

Research Design

The body of literature on this topic centers on drug policy and how it affects drug markets as well as

the nature of criminal organizations. We intend to evaluate Reuter, Warb et al, and Carpenter’s

assertion that drug violence is only a response to militarized aggression from police. We hypothesize

that there is a more rational decision going on, whereby drug cartels are weighing the costs of violence

in a thriving market versus the cost of violence in a restricted market. When profit margins are tight,

cartels are more willing to engage in violent assertions to protect their smaller market share. A

regression analysis of our data will allow us to mathematically study correlation between our data points

and will be conducted using SPSS. A scatterplot as well as adjoining tables will display our information

and can be found in our data analysis.

Wholesale value of cocaine was used as a price metric throughout the study, a value that reflects

“what you can get” for a kilogram of cocaine at the wholesale level. This price would likely be the price

most associated with drug trafficking organizations (DTO) and would likely be the price DTO’s would be

most responsive to. Though the wholesale price reflects wholesale data from the United States,

wholesale transactions are likely to occur between Mexican DTO’s and DTO’s based in the U.S., creating

the most incentive for Mexican organizations to reflect their actions off of this price. Though this price

likely fluctuates from both a supply and demand side, it is likely to change for an increasingly large

number of factors. However, the “what can you get” idea of DTO’s fetching the highest possible price for

a kilo of cocaine lends itself to disregard these fluctuations in price and rely on the price alone for

response in the form of violence.

Literature Review

Response to Authority

This school of thought holds that increases in systemic drug-related violence occur when security

forces crack down on the illicit drug trade. One place in which this dynamic was particularly evident was

Mexico between 2007 and 2008. Mexico’s declared “War on Drugs” ultimately increased violence. One

way that systemic violence can be explained is by gang and cartel leadership turnover. For example, in

2007 the U.S. Department of State reported that 83 individuals connected with drug trafficking in

Mexico were extradited to the U.S. for trial. Since cartel agreements are usually personal in nature,

changes in administration do not effectively transfer institutional agreements and institutional

knowledge. Furthermore, killing or capturing drug cartel leadership causes territory-seeking behavior

among rivals. For example, in Columbia in the 1990s, the destruction of the Medellin and Cali cartels was

followed by a significant surge in shooting deaths, as a larger number of organizations became violent to

protect their marginalized market share. Another important effect is “target hardening,” whereby

groups militarize in the face of an outside threat.

Secondly, police crackdowns on users and dealers in the U.S. has spurred a general decrease in

consumption of cocaine and heroin since 1988, and a further decrease in consumption of cocaine from

2000-2010. This means that the Mexican cartels market share of their most profitable drug, cocaine, has

been steadily decreasing, leaving many cartel members looking for something to do; violence is their

outlet.

Third, crackdowns on corrupt officials have the potential to increase drug violence. Former Mexican

President Felipé Calderón’s “War on Drugs” targeted corrupt government officials that turn a blind eye

to trafficking. This in turn drove cartels to target new honest police as a way to terrorize other

policemen and to eliminate police chiefs that obstruct their operation

Rational Choice Theory

This school of thought indicates that drug violence has a direct and linear relationship when compared

to drug prices, specifically heroine price at both the wholesale and retail levels. This relationship is

explained by the rational choice theory, which explains that actors behave in such a way as to maximize

positive outcomes and minimize loss or negative outcomes. When related to drug violence, rational

choice theory explains that actors resort to violence at a much higher rate when the price is higher

because the risk associated with the consequences of violent actions are outweighed by the potential

profits to be gained. As Fabrizio writes, “systemic violence will be committed only when the utility, in

monetary terms, will reward the risk and costs of such crime.” Thus, as price increases so too does the

likelihood of violence in order “to solve disputes over drugs, to conquer more market shares, to defend

ones [sic] own market share...”

Data covering both the US and Europe support this indication, leading to the conclusion that rational

choice theory does apply to the large scale drug/violence relationship. However, this data is specific only

to heroin, as the relationship between price of cocaine and drug related homicides did not support

Fabrizio’s hypothesis. This can be assumed that because the theory is being applied to drug users as well

as the those to be considered more rational business men involved in the trade, that data would be

skewed. It cannot be counted on for drug users and addicts to behave as a rational actor, thus rendering

the theory impotent as a stand alone lense through which to view the relationship between price and

violence.

Furthermore, it is misleading to limit the quantification of drug violence as a simple monetary value

versus risk analysis because many other factors outside of simple monetary reward analysis goes into

making the decision to commit a violent act, especially at the institutional level concerning gangs and

drug cartels. These organizations have other factors to consider beyond simple market value, and this is

not taken into account in the rational choice theory school of thought. However, that is not to say that

the school of thought is not useful, just that it must be used in tandem with other schools of thought so

as to fully explain the relationship between drug profits and drug related violence.

Drug Violence is Terrorism

Another school of thought focuses on the idea that drug cartels do not use violence solely in relationship

to price fluctuations of illegal narcotics, but rather as a means to a wide variety of ends. This school of

thought regards Mexican drug cartels as terrorist organizations, with political goals as well as monetary

goals. Thus, they will use violence in conjunction with these non-monetary goals in order to make

political statements or enforce their control over various territories. It assumes that drug cartels use

violence to send messages, to dissuade opposition, and to enforce their authority over the people that

live in their territories. In essence, violence is used for power, not just profit.

It is further argued that in addition to fighting for control over the drug market, the Cartels fight for

regional political control. This elevates them beyond the level of a simple profit maximization

organization and into the realm of an anti-governmental, or even quasi- governmental, organization.

Additionally, Cartels as organizations do not plan and commit violent acts for arbitrary or simple

reasons. The acts committed are thought out and meant to send a powerful message, as different acts

have come to mean different things. Cartel leaders are “strategists who view narco-terror as a tactic in

power struggles, not merely the bloody result of street fights, atavistic hatreds, or personal vendettas.”

This is not to say, however, that Cartels do not use violence for purely economic means also. Incursions

of Cartel members into territory held by a rival will often times result in horrific displays of violence,

which can be categorized as protection of shipping routes, and by extension the protection of profits.

Thus, while violence is used as a means with which to ensure profitability for a cartel, it is also used with

great care and planning as a tool with which to gain and consolidate political authority over physical

territories.

Market Maturation Model

The market maturation model suggests that violence within narco-trafficking is based on a number of

factors, but largely in the relative “age” of a drug market. As drug markets age an equilibrium is reached

which provides law enforcement with a given amount of activity met with a given amount of drug usage,

and that markets must merely “mature” to such a point. Though there will always be levels of systemic

violence, rapid and severe violence is only met in markets which have yet to truly mature.

On his essay pertaining to systemic violence in drug markets, Peter Reuter alludes to this idea when

discussing the U.S. crack cocaine market in the late 1980’s. Though Reuter notes that this may be due to

the aging of the actual participants in the drug market, this is directly linked with the ways those who

participate in the market buy, sell, and consume drugs. This idea is also alluded to in Letizia Paoli’s work

on the drug markets in post-Soviet Russia. These markets, first bound by travel restrictions and

repressive governance, opened up in the wake of the fall of the Soviet Union and Paoli describes the

Russian drug market as “shocked.” This suggests that the Russian drug market experienced rapid

changes and had to reach a new equilibrium in order to “remature.”

Analysis

Our research eventually led us to determine that as the price of cocaine increased in the US, for

whatever reason, so too did cartel related homicides in Mexico. However, this of course was limited to

states that exhibit heavy cartel activity, which in turn are along the major trafficking and smuggling

routes. As our research confirmed, these routes can be traced through certain states by the homicide

levels of each state. Furthermore, there are only a limited amount of cities on the northern Mexican

border that are able to sustain large amounts of land based smuggling into the US, such as Matamoros,

Tamaulipas; Juarez, Chihuahua; and Tijuana, Baja California.

These cities are significant because as the most important land entry points from Mexico to the US in

terms of trade these cities are obvious strategic sites from rival drug cartels, and competition over the

routes can be fierce. Therefore, as price of cocaine increases wholesale in the United States, it is logical

to assume that cartel bosses will push to move more contraband while the price is high. Thus,

competition becomes all the fiercer, leading to higher levels of violence and cartel related murders. This

is the driving factor behind our data, as the states of Chihuahua, Tamaulipas, Baja California, as well as

states with abnormally high cartel presence such as Sinaloa and Michoacan are constantly amongst

those with the highest cartel related murder rates, especially during periods of higher cocaine price. It is

therefore possible to predict both high levels of violence and murder when we see an increase in the

price of cocaine here in the US, as well as where the spikes in violence will occur.

It is also important to note that there may be a spillover effect to surrounding states, especially those

bordering states such as Chihuahua, Sinaloa and Michoacan due to the spread of cartel members in an

effort to drive out rivals and secure their shipment routes. Because a high portion of cocaine is shipped

by land in trucks, these routes (highways) are highly contested, making a spillover effect likely, especially

into high density shipping plazas. Furthermore, this spillover effect is caused by the ability of cartels to

charge what can be termed as rent to rival cartels in order to use shipping routes that they have

cornered. Thus, whomever controls these routes and shipment plazas gains revenue not only from the

cocaine that they sell within their cartel, but also from the rents charged so that other cartels can move

narcotics as well. Thus, spillover violence into neighboring states is likely, especially along states that

have major highways in them that lead into or out of cartel controlled territory.

Because these spikes in violence only occur in areas that have heavy cartel activity, and in some cases

are even largely controlled by the cartels, it allows us to understand that the relationship between

cocaine price and violence in Mexico is not coincidental, nor does it have to do with the variety of other

factors that usually apply to rising violence rates. While in many cases in many different parts of the

world violence and murder rates can be linked to poverty, education, or many other factors, in northern

Mexico especially it is clear that a spike in the price of cocaine is the causal force behind a rising rate of

murders as well.

Most interesting, however, is the rate at which homicides increased as price of cocaine also

increased. As can be seen in this graph, at a price of about $25,200 homicide rates begin to dramatically

increase. This is most likely due to the intense competition that higher prices naturally foster, but the

reason for such a dramatic spike at that exact price is unknown.

Though our first data point remains somewhat of an outlier, our model summary shows by the

R Square measure that nearly 60% of the points show correlation between the price and homicides, with

a statistical significance of .009, well below a .05 confidence. When geospatially mapped using ArcGIS

our data continue to show significant shifts in violence associated with price, but when this violence is

broken down by state it is more evident that the drug related violence is along trafficking routes.

Policy Implications

Historically, the war on drugs during the Calderon administration was prosecuted through a

heavily military strategy of decapitation of the leadership of cartels. However, as admitted by a recently

interviewed member of the Mexican Marines, this strategy does little to end the effectiveness of cartels

or curtail their violence. In fact, this strategy encourages violence due to the high levels of infighting it

creates. As more cartel leaders are either arrested or killed, power struggles become more prevalent,

and thus so too does the level of violence and cartel related murders.

Similarly, the policy of simply not talking about the cartel violence in Mexico, as has been the

strategy of the Peña Nieto administration, has done little to curb cartel violence as well. The same

strategies of the Calderon administration are still used and are still largely ineffective, however they are

combined with a policy of tartar de tapar el sol con un dedo, or trying to cover the sun with a finger.

This strategy centers most on talking about the cartels officially as little as possible in the hopes that the

problem will resolve itself in time, at least in terms of violence.

However, this data indicates that neither restrained media coverage nor a policy of leadership

decapitation will lead to a significant decline in cartel related violence. Focus instead should be placed

on the economics of the situation, on both sides of the border. Being a truly international problem,

efforts need to be taken to reduce the profitability of drug smuggling, instead of mainly focusing on the

smugglers themselves. Policies that would result in a lower profit margin for narcotics such as cocaine

would, according to the data, go a long way towards curbing DTO related violence, especially along the

previously mentioned routes which coincide with specific states.

Confounding Variables and Opportunities for Further Research

Though the data suggest a correlation, it is important to note a few important confounding variables

that may have changed the manner in which our data was truly represented, followed by some

opportunities for further research. First and foremost greater drug interdiction programs could have

cause a spike in violence and certainly around the same period of time we studied. A policy shift in

Mexico and what has become known as Mexico’s war on drugs truly came into its fullest being between

2006 and 2007, creating more friction between the Mexican government, Mexican law enforcement,

and Mexican DTO’s. The relationship between government spending and DTO related homicides would

be a wise next step in research, as that area is likely related to homicides yet this research does not span

government spending.

Conclusions

Drug-related violence in Mexico remains a major issue both for Mexican authorities and law

enforcement in the United States. This research shows that in the years studied there is a correlation

between drug price and drug related homicides. Though this data may not denote causation, it is

important that further research take place to discover possible roots of drug violence, whether they

occur in the United States or across the border in Mexico. Among other factors, it is important to

remember that drug trafficking organizations operate as a business and are interested in a great deal of

profit. In all, more serious research needs to be done to continue to find links between the consumption

of drugs in the United States and the trafficking of drugs in Mexico in order to give policymakers better

tools to execute their jobs correctly.

Appendix

Figure 1: April 2008: $23,200/ kilo

Figure 2: August 2009: $25,100/kilo

Figure 3: April 2010: $25,200/kilo

Bibliography

Campbell, Howard, and Tobin Hansen. "Is Narco-Violence in Mexico Terrorism?" Bulletin of Latin American Research 33, no. 2 (2014): 158-73.

Carpenter, C. Ami. Changing Lenses: Conflict Analysis and Mexico’s Drug War. Latin American Politics and Society. 55(3). 153.

Crop Prices 2004-2009: Retail, Wholesale and Purity. UNODC. January 2010.

International Drug Seizures Report 2006-2011. UNODC. January 2013.

Intentional Homicide Victims Killed by Gangs or Organized Criminal Groups 2005-2012. UNODC. January 2013.

Office of National Drug Control Policy.. “What America’s Users Spend On: 2000-2010.” February 2014. 4.

Paoli, Letizia. "The Development of an Illegal Market: Drug Consumption and Trade in Post-Soviet Russia." The British Journal of Criminology 42, no. 1 (2002): 21-39. Accessed February 21, 2014. http://www.jstor.org/stable/23638758.

Reuter, P. (2009). "Systemic violence in drug markets." Crime, Law and Social Change 52(3): 275-284.

Sarrica, Fabrizio. "Drugs Prices and Systemic Violence: An Empirical Study."

European Journal on Criminal Policy and Research 14, no. 4 (2008): 391-415.

Warb, Dan, Greg Rowell, Gordon Guyatt, Thomas Kerra, Julio Montanera, Evan Wood. Effect of Drug Law Enforcement on Drug Market Violence: A Systematic Review. International Journal of

Drug Policy 22 (2011) 91.