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ANALYZING THE CHANGING DYNAMICS OF PEACE IN MEXICO QUANTIFYING PEACE AND ITS BENEFITS The Institute for Economics and Peace (IEP) is an independent, non-partisan, non-profit think tank dedicated to shifting the world’s focus to peace as a positive, achievable, and tangible measure of human well-being and progress. IEP achieves its goals by developing new conceptual frameworks to define peacefulness; providing metrics for measuring peace; and uncovering the relationships between business, peace and prosperity as well as promoting a better understanding of the cultural, economic and political factors that create peace. IEP has offices in Sydney, New York, Mexico City and Oxford. It works with a wide range of partners internationally and collaborates with intergovernmental organizations on measuring and communicating the economic value of peace. For more information visit economicsandpeace.org CONTENTS EXECUTIVE SUMMARY 02 HIGHLIGHTS 04 1 RESULTS AND FINDINGS 06 2015 Mexico Peace Index Ranking 06 Most and Least Peaceful States 10 Trends in Peace: 2003–2014 17 Verifying the Trend: is Violence Really Declining in Mexico? 22 Metropolitan Peace Index 27 2 POSITIVE PEACE IN MEXICO 38 The Pillars of Peace 39 Correlates of Peace 41 2015 Mexico Positive Peace Index 46 Positive Peace in the Last Decade 49 3 ECONOMIC VALUE OF PEACE IN MEXICO 53 Impact of Violence on Business 62 4 EXPERT CONTRIBUTIONS 66 The Adversarial System and the Peace Index in Mexico by Guillermo Zepeda Lecuona, Director, Jurimetria 66 Building the Foundations for Peace by María Elena Morera, President, Causa En Común 15 Smart Spending on Security: Diagnosis and Proposals by Ethos, Laboratorio de Políticas Públicas 71 The Key is the Rule of Law by Juan Pablo Castañón Castañón, President COPARMEX 73 5 METHODOLOGY 75 Mexico Peace Index Methodology 75 Economic Costing Methodology 81 6 APPENDICES 85 Appendix A: Socio-Economic Data Sources 85 Appendix B: Movement in Rankings of States, 2003-2014 87 Appendix C: Mexico Positive Peace Index Methodology 88 REFERENCES 96 Mexico Peace Index 2015 EXECUTIVE SUMMARY The Mexico Peace Index, produced by the Institute for Economics and Peace, provides a comprehensive measure of peacefulness in Mexico from 2003 to 2014. This report aims to deepen the understanding of the trends, patterns and drivers of peace in Mexico while highlighting the important economic benefits that will flow from a more peaceful society. The Mexico Peace Index (MPI) is based on the work of the improved. There was also a significant reduction in the Global Peace Index, the leading measure of global violent crime rate, which fell by 12 percent. peacefulness that has been produced by the Institute for Furthermore, the recorded increase in peacefulness was Economics and Peace (IEP) every year since 2007. The MPI widespread. In the last two years, 26 out of the 32 states is part of a series of National Peace Indices, which includes saw improvements in peacefulness, with all of them the United States Peace Index and the United Kingdom recording reductions in the violent crime rate and 23 states Peace Index. recording reductions in the homicide rate. The biggest The 2015 MPI presents a somewhat optimistic but cautious improvements were recorded in the least peaceful states; picture of the state of peace in the last two years. Mexico’s contrary to the overall trend, the most peaceful states peace has improved 10.5 percent since 2012, continuing the became slightly less peaceful. These diverging trends trend from 2011, however 2014 saw very little improvement, resulted in a substantial narrowing of the gap between the improving only 0.7 percent. It is too early to determine least peaceful and the most peaceful states. whether this is a new trend. Mexico’s level of peace in 2014 In contrast, during the same two-year period, weapons approached 2007 levels, when homicide and violent crime crime increased significantly and was up by 11 percent. began to increase rapidly. The three other indicators that make up the MPI: justice The MPI indicators registering the largest improvements in efficiency, incarceration and police funding, have plateaued the last two years were the homicide rate, which fell by 30 or slightly deteriorated and are now at record highs. percent, and the level of organized crime, which improved The justice efficiency indicator continued to decline, which by 25 percent. All three measures in the organized crime is very concerning, with the number of homicides relative indicator; extortion, kidnapping and narcotics offenses to the number of prosecutions doubling from 1.45 in 2006 to 3.43 in 2013. The justice efficiency indicator measures 2 Mexico Peace Index 2015 / EXECUTIVE SUMMARY the ratio of homicide convictions to homicides in a given (MPPI) measures the attitudes, institutions and structures year and is used as a proxy for impunity. that support and sustain peace, as opposed to a measure of actual violence or fear of violence. The MPPI tells a Additionally, the rate at which people were sentenced to similarly positive yet cautious story. At the national level, prison fell from 210 per 100,000 people to 104 from Mexico scores relatively well on many measures of 2003 to 2014. Combined with the deterioration in the institutional strength and quality compared to other justice efficiency indicator, this is a troubling trend that countries at similar levels of peace and development. highlights the urgent need to fully implement the current justice reforms. IEP’s research has identified eight key Pillars that support and sustain peaceful societies. These Pillars act as a It should be noted that the declines in homicides and system, interacting with each other to create peace. gang-related violence do not necessarily mean that Deeper analysis of the key drivers of positive peace at criminal organizations are less powerful; they may have the sub-national level identifies three factors that have a become more circumspect in their activities. statistically significant relationship with peace in Mexico This reflects a paradox in Mexico: while indicators of today. All of the pillars need to be strengthened in unison peacefulness have greatly improved in the last four years, to create lasting resilience and peace, however the many Mexicans still report high perceptions of criminality. following three are key areas of focus for Mexican states: Additionally, officially recorded rates of homicide and violent crime are still very high by global standards. The functioning of government Underreporting of violent crime and other criminal Levels of corruption activities is a serious issue in Mexico, with IEP estimating Good relations with neighbors that rape is reported only eight percent of the time and assault only 23 percent. To create a more accurate index, Critically, the report highlights that the economic benefits IEP has adjusted all indicators for underreporting rates. from improvements in peace are large. It is estimated that the total economic impact of violence in Mexico is three For many, these concerns create doubt about the trillion pesos or US$233 billion, which is equivalent to reliability of criminal justice statistics. To determine the 17.3 percent of Mexico’s GDP. This represents $24,844 veracity of the official data, IEP compared various pesos, or almost US$1,946 per person in Mexico. alternative datasets and victimization surveys against the official data. The results tend to support the trend towards The difference in GDP per capita between the 16 most higher levels of peace, but with some qualifications. peaceful and 16 least peaceful states in 2003 was 35 percent, rising to 58 percent in 2014. If the least peaceful The analysis strongly supports the improvement in the states had the same economic growth as the most homicide rate, the most critical indicator of the MPI. peaceful states, the Mexican economy would have been There is little comparable data for violent crime, with 13 percent larger in 2014. victimization surveys not asking questions comparable to the MPI indicators. If Mexico were to become more peaceful, then expenditure on violence containment could be redirected The survey data on some indicators, such as organized to more productive areas such as infrastructure, crime, reveal contradictory trends, with perceptions of innovation or education. As such, the benefits of a peace gang activity going down but experiences of extortion, dividend to Mexico could be very large. kidnapping and fraud going up. Survey data related to confidence in the police has The focus of this report is to present data and research shown an improvement over the last three years. This on the patterns, trends, causes and benefits of peace in supports the trend in the official figures. Mexico. It does not seek to make specific policy recommendations nor value judgments on the The contradictions between perceptions and experience- appropriateness of current government responses; based survey data when compared with official recorded rather it aims to inform a strategic discussion amongst data demonstrates the need for a more systematic policymakers, researchers, business leaders and the approach to measurement. Official data needs to be general public. This report is organized in five sections validated by independent surveying, while appropriate presenting results and findings of the 2015 MPI questions need to be asked to clearly confirm or including a trend analysis of 2003 to 2014; the Mexico contradict official trends. Better funding for independent Positive Peace Index; the economic value of peace in think-tanks and research organizations would provide Mexico; essay contributions from experts in Mexican greater certainty and assurance for the public debate. civil society and the private sector; and a detailed description of the MPI methodology. To help inform policy, a Positive Peace Index was also developed for Mexico. The Mexico Positive Peace Index 3 Mexico Peace Index 2015 HIGHLIGHTS Mexico has experienced a large decrease in violence since 2011, with the national level of peace improving by 16 percent.

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