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Mexican Drug Cartels and the Limits of Rational Choice

MEXICO / 2 DEC 2011 BY GEOFFREY RAMSEY EN

Though alluring, the idea of analyzing Mexico's drug cartels based on economic principles may be a false hope for policymakers, giving the false idea that these groups' actions can be explained and predicted.

In a recently published paper entitled “Trafficking Networks and the Mexican Drug War,” Massachusetts Institute of Technology PhD candidate Melissa Dell offers some important insights to analysts studying patterns of violence associated with Mexico’s drug war. For those interested in a concise overview of Dell's research, economic analyst Ray Fisman neatly profiled her work at Slate.

The most interesting aspect of Dell's paper is that, using a purely economic approach to the phenomenon, she is able to effectively map out the effects of the government’s security crackdown. In doing so, Dell eschews the more common, qualitative approach to analyzing drug cartels’ behavior based on case studies, in favor of one which employs rational choice theory.

According to her, the drug trafficking organizations active in Mexico can be seen as highly rational, self-interested actors which seek to maximize profit. Dell maintains that wherever the Mexican government has increased its troop presence and cracked down on drug trafficking in one municipality, cartels have responded by diverting their trafficking networks in predictable ways through nearby areas which are deemed to be less risky.

Using a complex simulation based on comparing towns whose mayors are more closely associated with the ruling National Action Party (PAN) security agenda, against those led by politicians of other parties, Dell has accurately modeled the changes in trafficking routes that drug cartels adopt in response to a crackdown.

In the past, InSight Crime has published an array of content featuring rational choice-based approaches to organized crime patterns in places like Mexico, Central America and Colombia. But, while such narratives are useful in moving beyond the hysterical response often associated with crime in the region (frequently perpetuated by the media’s disproportionate focus on drug-related violence as “senseless”), they have their flaws.

It is true that the nature of the world market for illicit drugs ensures that the profit motive is behind much of drug cartels’ behavior, but it is important to remember that they are also influenced by a myriad of other factors which do not easily translate into cost-benefit calculations.

A relatively common example of this kind of behavior can be found in the growing increasing incidence of massacres committed by Mexican drug cartels. Outrages such as the August 25 firebombing of a Monterrey casino, likely carried out by the Zetas as a warning to businesses which defy extortion payments, attract police attention and lead to crackdowns on cartel activity. If the Zetas were purely rational actors, such indiscriminate acts of violence would not be so common.

The same logic can be applied to the issue of murders of U.S. citizens in Mexico. Considering the high degree of U.S. support for Mexico’s security push, and the fact that some American politicians have even called for the U.S. to adopt a counterinsurgency strategy against Mexican cartels, one can reasonably assert that there is a strong incentive to avoid killing U.S. citizens. Despite this, the U.S. State Department claims that the first six months of 2011 was the most deadly period of the past eight years for U.S. citizens in Mexico.

One non-rational characteristic of Mexico's trafficking groups is their tendency to divide and divide again. From the almost monopolistic Guadalajara Cartel which towered over the country's drug trade in the 1970s have sprung many of the current groups we see today. These splits have often been driven by personal vendettas and family feuds. The Federation that dominated the business in the early 2000s split when Joaquin·Guzman, alias "El Chapo," apparently ordered the murder of the brother of·Juarez Cartel leader Vicente Carrillo Fuentes -- this despite the fact it would likely have been safer and more profitable to stay in a unified mega-group.

A related problem with rational choice analysis is the assumption that cartels themselves can be treated like relatively cohesive actors. Models like Dell’s treat drug trafficking organizations like rival sports teams or corporations. However, more often than not this assumption does not hold. In fact, relations between local cells of cartels are much more likely to vary according to complex regional identities and variations in the strength of the chain of command.

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