Organized crime, linked to cocaine trafficking, is having dreadful manifestations in regions in the United States, Mexico and Colombia. This paper analyzes empirically such manifestations and the local authorities'' response in these countries. A law enforcement model is presented where the reaction of authorities to shocks in the level of violence is analyzed within a framework of decentralized police and judicial decision-making, along the lines of Lucas (1973, 1976). Namely, law provision is performed at the regional level, with the response of authorities depending crucially on their perceptions regarding the origins of violence. To the extent that the causes of violence are systematically perceived as originating beyond local boundaries, the response of the violence shock at the regional level will vanish over time. This in turn implies that the total provision of justice in the country will be lower. We claim that this describes the Colombian experience during the 1980s and 1990s, Mexico''s current situation and, to a lesser extent the US''. We argue that over the past 10 years, the latter has responded differently to the rise in organized crime because in the thirties and seventies it developed federal institutions to confront this type of supra regional phenomenon. Colombia did the same in the late nineties and Mexico has just begun to do so.
Former Minister of Finance of Colombia (Aug. 2010-Sep. 2012) and Minister of Economic Planning (Sep. 2000-Aug. 2002). Former Dean of Economics at Universidad de los Andes (Bogot'). Macroeconomist, policymaker and university professor, experienced in economic and political analysis. Responsible for the technical design and congressional approval of Colombia's economy stabilization package, 1998-2002; and for the program for Colombian economic takeoff, 2010-2014. Advisor during eight years of international banks and financial institutions with Global Source, a New York based consultancy, and Econcept, a Bogot' based consultancy. Weekly editorialist of CNN en Espa'ol (Atlanta) for three years. Strong theoretical and econometric skills. Proficient at presentations to specialists and the general public. Teaching experience at New York University and Universities in Colombia. Expert witness in litigations in topics of infrastructure concessions and finance. Has published papers in different fields of economics, in specialized journals, and three books on the Colombian economy; has participated in books on the Africa's and the Pacific Basin's economic development.