José Ramón Enríquez González (Harvard University)

Democracy under Assault: Electoral Reform and Political Violence

Abstract

When do criminal organizations use violent means to influence political outcomes? I argue that criminal groups use violence when other channels of influence, namely bribes, are no longer available to them. I use an entry model with asymmetric information to show how both politicians and criminal groups adjust their decision to accept a bribe and to attack in response to changes in the relative costs of employing each strategy. I then test the predictions of the model exploiting a national-level electoral reform in Mexico that increased the politicians' cost of accepting bribes. I use an original dataset of attacks on politicians to measure violence and confidential administrative reports of suspicious financial transactions in retail banking to measure bribes. My findings indicate that the reform did in fact decrease the number of suspicious financial reports by around 4 percent (~ 650 fewer reports) while the number of attacks increased by approximately 2 percent (~ 44 more attacks). Consistent with the model, additional evidence suggests that 1) criminal organizations use attacks when they fail to reach an agreement with politicians, and 2) most of the effects of the electoral reform are concentrated in municipalities where politicians are financially constrained and where they have less information about the criminal group due to the presence of new or contesting criminal organizations. These findings have implications for our understanding of local governance, particularly in contexts where illicit groups attempt to influence political processes.