How Mexico's Militarized Drug War Screws Up Everything

Gustavo Flores-Macías, "The Consequences of Militarizing Anti-Drug Efforts for State Capacity in Latin America: Evidence From Mexico," Comparative Politics 51, 1 (October 2018): 1-20.

Abstract (ungated, at least right now).

In response to the threat posed by drug-trafficking organizations, developing countries are increasingly relying on the armed forces for their counter-drug strategies. Drawing on the literature on violence and state capacity, this article studies how the militarization of anti-drug efforts affects state capacity along two dimensions: public safety and fiscal extraction. It advances theoretical expectations for this relationship and evaluates them in the context of Mexico. Based on subnational-level analyses, it shows that the militarization of anti-drug efforts has decreased the state's capacity to provide public order and extract fiscal resources: homicide and kidnapping rates have increased while tax collection has decreased. Given the wide-ranging consequences of diminished state capacity, the findings have implications not only for Latin America but also across the developing world.

Really interesting qualitative analysis. The first point is intuitive--as the state focuses on militarization, it actually ratchets up violence. Homicides increase as Drug Trafficking Organization generate greater firepower in response. Meanwhile, the military itself was also responsible for deaths.

The second point, about tax collection, is something that has not occurred to me before. All the increased violence increases a general sense of dissatisfaction with the government.

In addition to dissatisfaction, the prevalence of extortion in the context of deteriorated public safety has also affected fiscal extraction. As media reports have shown, extortion payments often prevent people from fulfilling their tax obligations, since people’s resources are limited and the threat to their physical integrity is imminent if they do not pay extortionists. For example, mining companies are forced to pay high protection fees to ship minerals through certain parts of Durango. In Michoacan, mining companies pay DTOs 7 USD per ton of iron ore extracted. In Veracruz, media reports point to the choice small businesses face of meeting their tax obligations or paying extortion fees in order to stay afloat.

People are mad, businesses are being shook down like never before, and so tax revenue also goes down. Lose-lose-lose.