Drug Market in Mexico and its Economic Impact: Stylized Facts, Reasons and Solutions

The illicit drug market in Mexico has been a major problem due to its impact in the sociological point of view. Researches in this paper states evidence for the factors (bureaucracy, gun trafficking, income inequality etc.) that deteriorated this problem, causing negative socioeconomical impact with an increase in drug-related crime rate (homicide, kidnapping, money laundering), and other relative consequences like the increases in net migration outflow, causing decreases in labor market, further decreasing the GDP and effecting the economy. The main problem found during research is the bureaucracy, which means the inner part of the political system in Mexico, remains chaotic with the interference of drug cartels. Further involving in the corruption of official economic organizations. So for the suggestion to fix this problem is basically based on fixing the political system, and seeking help from USA by reinforcing the border defense (cutting down the trafficking route of drugs and weapons) and strengthening the Marina army (anti-cartel army in Mexico) to suppress drug cartels.