What if the United States bucked the trend of nation-states and instead went the way of companies? What if, for instance, the U.S. decided to merge with Mexico? Welcome to Amexico, with a population of nearly half a billion people and the best hamburgers and enchiladas in the world. Is this as crazy as it sounds? That’s the question we explore in our latest Freakonomics Radio episode, “Should the U.S. Merge With Mexico?” (You can download/subscribe at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript; it includes credits for the music you’ll hear in the episode.) Read More »
As Americans watch Europeans condemn the discovery of horsemeat in their Ikea meatballs, we can take some solace in the fact that, for once, we’ve sidestepped an industrial food-related travesty. Our complacency, however, could be short-lived. Although less dramatic than horse DNA adulterating ground beef, another horse-related scandal is about to implicate U.S. citizens in a scheme that will send tainted horsemeat into foreign markets while enriching U.S. horse slaughterers with taxpayer dollars.
The last U.S.-based horse slaughterhouse closed in 2007. The phasing out of horse slaughter in the United States ended the exportation of U.S.-produced horsemeat to Canada, Europe, and Japan. This development, among other accomplishments, spelled the decline of a niche business that profited from a product that American taxpayers financially supported (through USDA inspection of horse slaughterhouses) but were loathe to consume (plus, it’s illegal to sell horsemeat in the U.S.). Read More »
Beneficiary women are 40 percent less likely to be victims of physical abuse, but are more likely to receive violent threats with no associated abuse. This evidence is consistent with a model of decision-makers’ interactions with asymmetric information in the male partner’s gains to marriage, who can then use threats of violence to extract rents from their female partners.
“The article may have important implications for policy, since it provide a mixed view of conditional cash transfer programs’ effectiveness in improving women’s empowerment within the household,” the authors wrote in an earlier draft. “The program may increase the likelihood of violent threats, which may in turn compromise women’s emotional health and other aspects of their wellbeing.”
Here’s a fascinating new working paper from Yale economist David G. Atkin, called “Endogenous Skill Acquisition and Export Manufacturing in Mexico” (abstract here; PDF of an earlier version here). The gist:
This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms, the years 1986-2000, altered the distribution of education. I use variation in the timing of factory openings across municipalities to show that school dropout increased with local expansions in export manufacturing. The magnitudes I find suggest that for every twenty jobs created, one student dropped out of school at grade 9 rather than continuing through to grade 12. These effects are driven by the least-skilled export-manufacturing jobs which raised the opportunity cost of schooling for students at the margin.
It makes sense, of course, that students on the margin might happily abandon school in favor of a good job. But is that necessarily a bad thing? How should a society balance jobs and educational ambition? And who should be thinking harder about this issue — India or China? Or perhaps the U.S.? Read More »
Through Innovations for Poverty Action, I am co-Principal Investigator on a randomized trial of the impact of Compartamos, a for-profit microlender in Mexico. Compartamos was the first microcredit organization to go public, and at IPO time had a market capitalization of US$1.5 billion. Needless to say, that created a lot of buzz. Several years later, we will soon be finishing a randomized trial to measure the impact on communities in the Nogales area in northern Mexico.We will be posting our hypothesis before we do the analysis, and encourage readers to do the same, for three reasons: Read More »
A reader called HDT writes to say:
I live in Mexico and have often wondered why more American economists and students of economics don’t often venture down here because the country offers what seems, to me at least, a treasure trove of economic oddities that should fascinate anyone interested in how markets work.
* As Mexico is heading toward what’s likely to be the second most important election in its history, the subject of vote-buying is of particular interest if for no other reason than that it’s practiced fairly openly, especially in rural areas. I know that during the last elections, here in Yucatan, votes were being bought, in cash, for around $80. (Pigs and cows were also exchanged for votes, but I wasn’t ever able to find out what the “going rate” was for those particular transactions.) There are, of course, people employed by the major political parties who specialize in determining what votes are worth throughout the country. I imagine they’re easier to find, and talk to, than you might expect.
* There’s also the rather intriguing issue of how Mexican real estate agents determine a reasonable price for any given property they’re hoping to sell. The problem is that it’s customary to decrease the tax burden on the sale of a home by getting the buyer to lie about how much he or paid. In other words, the sales prices stated in government records are almost never accurate. Everyone knows this. And yet, properties regularly change hands and real estate agents do manage to make a living. But how?
A few weeks ago, Freakonomics received an email from a man in Mexico City describing the effects of Mexican drug cartel violence on daily life and asking for our solutions to his country’s seemingly endless crime problems. This week, The New York Times ran a piece on Mexican drug cartels and growing American infiltration of criminal organizations. Now, a new report from RAND on drug-trafficking violence in Mexico analyzes the situation in the context of an insurgency, bringing to bear research on defense-sector reform.
What’s clear is that the drug-fueled violence in Mexico has diversified over the last decade into several other underworld activities: human trafficking, weapon trafficking, and assassinations, just to name a few. In other words, the cartels are no longer just cartels — they are something larger.
The RAND paper reiterates many points that have become familiar to us about the situation in Mexico: corruption is rife, policing is weak. It also looks at how high unemployment and a “youth bulge” have helped fuel Violent Drug Trafficking Organizations (VDTO). For many young unemployed people, joining a crime syndicate is often the best job option. But the most jarring part of the paper is the discussion and comparison of Mexican drug violence to other insurgency trends around the world. Rather than a war on crime, what if the battle with cartels is really a battle with different insurgent groups? Read More »
A reader named Rodolfo Ostolaza writes in with a most heartfelt plea about violence in Mexico. He would welcome all suggestions.
Read More »
I live in Mexico City and, although the wave of violence in my country has not yet fully reached this area, I’m worried because we are living a state of terror, with bloody attacks, and a lack of humanity. That is why I am requesting your help.
What do you think we can do to change this? According to the chapter on crime reduction in Freakonomics, a judge’s decision was more influential than a change in public policy and law enforcement bodies in reducing crime in the U.S. I wish we could apply this “recipe” (allowing abortion throughout Mexico, which is currently legal only in Mexico City) to keep the hope that, in the future, things will be brighter. However, considering the Mexican idiosyncrasy, with strong influence of the Catholic Church, I believe that this measure would have, at best, a marginal impact.
I want you to share this question with your readers. Give us suggestions, ideas, different perspectives to analyze the problem. What follows are some thoughts and questions of how, I think, the problem should be analyzed.
First we must understand precisely the problem itself. It is true that the violence began to grow exponentially after President Calderón declared war.