Follow the Money: An Analysis of the Geographic Variation of Gang Violence in El Salvador

Abstract

The rise to power of the two most prominent Salvadoran gangs, MS13 and Barrio 18, has led to a growing literature investigating the spatial and temporal patterns of homicides across the municipalities of El Salvador. However, none of these studies have accounted for a major historical event in the country: the 2012-2013 truce between MS13 and Barrio 18. This ceasefire initially led to a substantial decline in the homicide rates in El Salvador before collapsing in 2013, triggering a wave of violence unseen since the late 1990s. To capture these developments, this paper explores the geographic variation of gang violence in El Salvador both during and after the gang truce. Given that extortion is the most important revenue source for both MS13 and Barrio 18, I compare two different sources of extortion – businesses and remittances – and find that business density best determines which regions in El Salvador are most vulnerable to gang development. I then proceed to the municipal level, and I find that high business density municipalities have higher homicide rates than low business density municipalities from 2012 to 2017. Finally, I conduct a regression to study the impact of U.S. deportations on municipal level homicide rates in El Salvador after the 2012-2013 truce. My results indicate that high business density municipalities become disproportionately more violent with an increase in deportations.