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Independent research for global prosperity


Views from the Center


I’m thrilled to announce the public launch of a new CGD study group called Beyond the Fence. I’ll summarize its first research products here, and we’ll be blogging about each of them in the weeks ahead.

CGD studies the ways that the richest countries affect the rest of the world, far beyond foreign aid. And the US massively shapes economic development in its neighbors to the south. The 2,000 mile border between the United States and Mexico is an economic cliff, the largest GDP per capita differential found at any land border on earth. Across this fault line, the two nations continue a deep and centuries-old exchange of goods, services, investment, labor, culture, and ideas.

Some of those interactions happen through flourishing, transborder illicit markets—such as those for drugs, arms, and labor—with major economic and social effects for both sides. The political economy of these markets is complex and poorly understood. It is shaped by a policy approach that is today dominated by unilateral, domestic law enforcement.

CGD convened the first meeting of the Beyond the Fence group a year ago. We wanted to get to know some of the top researchers in the world studying, with high standards of rigor, how policy decisions on one side of the border ripple to the other side through illicit markets. And we want to use that research to inform a policy debate on bilateral approaches to innovative regulation in those markets. This group will distinguish itself with its academic credibility and with its focus on facts over political correctness.

That initial meeting brought together leading economists from the United States and Latin America whose research uses frontier techniques to learn about the policy dilemmas that arise from transborder illicit markets. Some of that meeting’s participants have become our initial contributing authors.

Beyond the Fence wants research-based answers to these questions:

  • What are the determinants of participation in illicit markets, and of subsequent violence and instability? What are the effects of violence on the economy?
  • What are the impacts of current policies—including interdiction and other enforcement operations, violence prevention efforts, and drug decriminalization?
  • What new policies should the US, Mexico, and Central America explore to address these challenges?

We’re just getting started, and there’s a lot more to come. But I’m excited to announce that we’ve posted the study group’s first three papers:

  1. How does the North American corn trade affect illicit drug markets? CGD non-resident fellow Oeindrila Dube, and her co-authors Omar Garcia-Ponce, and Kevin Thom (all at NYU), contribute new work showing how falling prices in legal crops can push farmers to cultivate illicit crops like marijuana and poppy, with knock-on effects on drug violence.
  2. How do enforcement efforts in producer countries affect violence in transshipment countries? Juan Camilo Castillo and Daniel Mejia (Universidad de los Andes), and Pascual Restrepo (MIT) examine the relationship between cocaine seizures in Colombia and violence in Mexico. They show that drug interdiction in Colombia affected prices in Mexico, and that this in turn explains roughly one-fifth of the sharp rise in homicides in Mexico following 2007.
  3. A small contribution of my own is an essay examining skilled migration from Mexico, available in English and in Spanish. While the majority of documented and undocumented Mexican workers in the US are in low-skill jobs, the proportion of Mexican migrants who are skilled workers has been increasing over the last ten years. I discuss why this is a natural development that should not cause undue concern in Mexico.

The name Beyond the Fence has a dual meaning—embodying our desire for researchers to investigate the effects of policy that cross the fence, and our hope that policymakers will be able to use these findings to reach beyond unilateral enforcement approaches. Additional works are in the early stages of development, by me and by some of our brilliant scholar-partners.

I look forward to sharing and discussing them more with you as the initiative evolves. Follow us at the study group’s Twitter feeds: @BTFence in English and @MAdelMuro in Spanish. 


CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.