Fueling Organized Crime: The Mexican War on Drugs and Oil Thefts

Battiston, Giacomo; Daniele, Gianmarco; Moglie, Marco Le; Pinotti, Paolo

doi:10.2139/ssrn.4007993

Cited by 2 publications

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“…My results are in line with Berman, Shapiro, and Felter (2011), Fetzer (2014), Crost, Felter et al (2016), Wright (2016), Beath, Christia, and Enikolopov (2017), and Fetzer, Souza, Vanden Eynde, and Wright (2021), who show how conflict and tactics change with financing, as highlighted by Bueno de Mesquita (2013). Recent work by Battiston, Daniele, Le Moglie, and Pinotti (2022) find that drug cartels respond to the war on drugs in Mexico by diversifying their financing away from drugs toward large‐scale oil thefts and this changes the competitive landscape between groups. Relatedly, Bueno de Mesquita (2005a,b, 2007) argue the importance of financial counterterrorism compared to alternative strategies, and my empirical evidence shows the existence of the financial frictions reinforcing this hypothesis 5…”

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confidence: 99%

Terrorism Financing, Recruitment, and Attacks

Limodio

2022

ECTA

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This paper investigates the effect of terrorism financing and recruitment on attacks. I exploit a Sharia‐compliant institution in Pakistan, which induces unintended and quasi‐experimental variation in the funding of terrorist groups through their religious affiliation. The results indicate that higher terrorism financing, in a given location and period, generate more attacks in the same location and period. Financing exhibits a complementarity in producing attacks with terrorist recruitment, measured through data from Jihadist‐friendly online fora and machine learning. A higher supply of terror is responsible for the increase in attacks and is identified by studying groups with different affiliations operating in multiple cities. These findings are consistent with terrorist organizations facing financial frictions to their internal capital market.

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