Friday, August 5, 2011

On the Splintering of Mexico's Drug Industry

I have a piece looking at the changes in Mexico's drug industry at InSight Crime. Here's my takeaway:
The most obvious reason for the growth of the smaller gangs is pressure from the federal government. A significant number of kingpins have been killed or arrested in the past two years in particular, and one capo’s demise often sparks fighting between subordinates and rivals for control of his network. (The government denies this, though not very convincingly.) But even beyond the takedowns of capos, a more aggressive federal policy creates space for newcomers, because one group losing a significant chunk of its operators or having its favored cocaine route shut down by the army creates opportunities for ambitious small-timers.

But this is not a one-off phenomenon; instability breeds further instability, because the new groups don’t enjoy the same level of dominance as their predecessors did. Even after winning control over a given territory, their reign is subject to continued challenges. This dynamic is further aided by the fact that two of the groups that have emerged in recent years -- the Zetas and the Familia -- are aggressively expansionist. All of this, of course, has driven spiraling levels of violence, essentially generating just the sort of feedback loop which Mexico has been struggling to break free for the past several years.

The current violence notwithstanding, there are a certain number of advantages to an industry populated with scores of smaller gangs rather than a handful of giants. One is that the new mafias will be less wealthy than the billion-dollar behemoths, and therefore less capable of corrupting public officials. Insofar as less wealth implies less power, eventually the constellation of smaller groups will likely adopt a more defensive position with regard to the government.

But unfortunately, the transition to a more disperse industry is causing a great deal of bloodshed today. And until the industry settles at a more tranquil and stable equilibrium, the chaos and violence will endure, causing some to long for the good old days of the big cartels.

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