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Following the implementation of the NAFTA free trade agreement, more people lost their lives in violence along key drug trafficking routes to the USA than in previous years / publication in the ‘Journal of Development Economics’
The opening of trade borders under the North American Free Trade Agreement (NAFTA) in 1994 was accompanied by a significant increase in drug-related violence in Mexican regions that functioned as key corridors for drug trafficking. That is the result of a recent study by Erik Hornung, Professor of Economic History at the University of Cologne’s Faculty of Management, Economics and Social Sciences and member of the ECONtribute Cluster of Excellence at the Universities of Cologne and Bonn. Together with his co-authors Eduardo Hidalgo, Ph.D. (doctorate at the University of Cologne) and Professor Pablo Selaya, Ph.D. (University of Copenhagen), he found that in communities located along strategic drug trafficking routes, the homicide rate among males aged 15 to 39 increased by 2.1 cases per 100,000 after the treaty entered into force, which means an increase of 26 percent. There was no comparable increase in municipalities without such routes.
Violence was concentrated along strategic trade routes
The researchers analysed how violence developed spatially after NAFTA came into force in 1994. To do this, they linked municipal data on homicides with self-calculated optimal trafficking routes. Using the so-called Dijkstra algorithm, they identified those routes connecting established drug trafficking locations in Mexico with U.S. land border crossings via the existing road network.
The results show: the increase in violence occurred almost exclusively in communities located directly along these calculated smuggling routes. The effect was particularly strong on routes leading to U.S. border crossings with high trade volumes and rapidly expanding goods traffic as a result of NAFTA. In more distant regions, violence decreased in some cases.
Drugs were easier to smuggle across the border
When NAFTA came into force in 1994, Mexican exports to the USA doubled in terms of gross domestic product within just a few years. At the same time, cross-border truck traffic rose sharply, while inspection rates fell. Illegal drugs such as cannabis, opium, and cocaine could be hidden more easily in legal flows of goods and transported via busy border crossings. “This apparently increased the profits of Mexican drug cartels and the value of controlling the most profitable trafficking routes, leading to increased violent competition among criminal organizations for these corridors,” says Professor Hornung.
The study also examined alternative explanations for the increase in violence. NAFTA changed the Mexican economy considerably, among other things by intensifying import competition in the agricultural sector, especially for maize farmers. Theoretically, lower incomes could have made criminal activities more worthwhile if the alternative of doing legal work was less profitable. However, the analyses show that the observed increase in violence along smuggling routes cannot be explained by increased import competition: smuggling routes do not overlap with regions affected by import competition. There are also no effects in population groups outside typical offender profiles, and no increase in other causes of death such as accidents or suicides. The results thus clearly speak in favour of a so-called ‘rapacity effect’: increasing profits in the illegal sector led to violent competition for strategic trafficking routes.
Communities located along the identified trafficking routes continued to have above-average rates of homicides related to drug trafficking throughout the 2000s. This violence was mainly due to conflicts between rival cartels; clashes with the police or military played a minor role.
“Our study shows that despite all the benefits, free trade can have unintended consequences,” says Professor Hornung. “Abolishing free trade because of this is not a solution. Instead, we need effective measures against drug-related violence.”
ECONtribute: Markets & Public Policy
The Cluster of Excellence ECONtribute: Markets & Public Policy at the Universities of Bonn and Cologne addresses pressing societal and technological challenges such as global financial crises, rising inequality, political polarization, digitalization and climate change. Researchers from economics and related disciplines work on innovative approaches to analyze markets and public policy and develop responses to such challenges.
Press and Communications Team:
Maria John Sánchez
Science Communications Manager ECONtribute
+49 228 73 7859
maria.johnsanchez@uni-bonn.de
Professor Dr Erik Hornung
Faculty of Management, Economics and Social Sciences
ECONtribute Cluster of Excellence
+49 221 470 2331
hornung@wiso.uni-koeln.de
https://doi.org/10.1016/j.jdeveco.2026.103719
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