Understanding Political Risk in Mexico: Investment Opportunities after the 2026 FIFA World Cup
Some outlets estimate that Mexico generated 87 billion Mexican pesos (MXN) (Yañez, 2026) during the football competition (around USD 4.8 – 5.1 billion). This may renew investor interest, particularly in sectors linked to major events, tourism, entertainment and real estate. However, businesses and investors should carefully assess how ongoing organised crime and violence intersect with political and commercial risks.
This brief examines three of Mexico’s states: Mexico City, Nuevo León (Monterrey), and Jalisco (Guadalajara), which hosted the World Cup matches, to outline how state-level data can provide useful insights but should be supplemented by local knowledge and partnerships. This will be analysed alongside two indicators related to violence and crime: homicide rates (the most recent data available from 2024) and reports of corruption cases.
Using homicide, corruption, and FDI data from these three states, the brief argues that state-level indicators provide a valuable starting point for political risk assessment but should be complemented by local knowledge and contextual analysis.
Overview: Economy and Investment Opportunities
Mexico is the second-largest economy in Latin America (World Bank, 2025) with several core sectors, including tech, oil production, mineral exploitation, and manufacturing (Crédit Agricole Group n.d.) and benefits from several characteristics that attract investment, including its proximity to the United States, a young workforce, and higher consumer spending (CFA Institute Research & Policy Centre, 2024). The country is also subject to considerable regional variation. Mexico has significant levels of inequality, where GDP per capita in the poorest regions is approximately one-sixteenth that of the richest regions (Nieto, n.d.). This inequality may also constrain longer-term economic development and slow progress towards broad-based growth (López-Calva et al., 2025).
These factors may affect Mexico’s economic outlook and must be incorporated into broader investment risk assessments. This also reflects broader trends across emerging market and developing economies, including Brazil, Colombia, China and India, where growth and productivity have slowed (Balatti et al., 2025). However, Mexico continues to attract substantial foreign investment, illustrating that investment decisions are shaped by a broader set of economic and institutional considerations than macroeconomic indicators alone might suggest. Despite these challenges, the country continues to attract significant foreign investment (as shown below), which reached USD 44.09 billion in 2025 (World Bank, 2025).
Security and Political Risks
Investors must also navigate a complex political and security landscape. Transnational organised crime, corruption, and insecurity are important considerations, at both national and regional levels (United Nations Development Programme, 2025), yet these risks are unevenly distributed across the country. National indicators provide valuable context but often obscure important differences between states and municipalities. Consequently, assessing how these dynamics affect human, social, and economic development is difficult to isolate.
Beyond the significant human and health costs to society, corruption and violence have significant impacts on economies. The United Nations Office on Drugs and Crime (UNODC) specifically emphasises the detrimental impact corruption can have on attracting and retaining foreign investment, fair competition, and the quality of investments attracted, which in turn affects economic opportunities within the recipient state (UNODC, n.d.).
Quantitative studies highlight that the economic cost of violence was estimated at USD 132 billion in 2015 (Rolles et al., 2012) and a projected USD 1.6 billion in lost investment opportunities (World Economic Forum, 2016). Garriga and Phillips (2023) found that the number of criminal groups impacts the levels of FDI. Furthermore, Mexico scores 7.68 on the Global Organized Crime Index, making it the country with the third highest level of criminality of the 193 countries examined (Organized Crime Index, n.d.).
Figure 1 illustrates the geographical distribution of the focus states, with the shading representing the different homicide rates across states in 2024. Mexico City, Nuevo León and Jalisco are distinct economic regions with differing institutional and security environments, making them useful comparisons for assessing investment conditions. All three, however, experienced relatively high levels of fatal violence in 2024. For investors, these figures provide a useful indication of the broader security environment but should not be interpreted as reflecting risks uniformly across each state.
Figures 2A and 2B below compare foreign direct investment and corruption incidence across the three states. The challenge for political risk assessment is not simply identifying these risks but understanding how they vary across locations and how they affect investment decisions.
Figure 2: A) Mapping Foreign Direct Investment (top) and B) Corruption Incidences (bottom)
Figure 2A illustrates substantial differences in foreign direct investment between the three states. Mexico City overwhelmingly dominates, with total FDI increasing from approximately US$16.6 billion in 2018 to more than US$76 billion in 2025. Nuevo León also experienced sustained growth, although at a considerably lower level, while Jalisco attracted comparatively modest and more volatile investments. These trends indicate that investors continue to commit substantial capital to states facing different governance and security conditions. High levels of investment therefore cannot be interpreted as concrete evidence of low political risk. Figure 2B further shows the complexity of political risk. Although Mexico City consistently records the highest corruption incidence among the three states, it also attracts by far the largest volume of foreign direct investment. Nuevo León follows a different trajectory, combining relatively strong investment performance with fluctuating corruption rates. Meanwhile, Jalisco experienced declining corruption incidence in recent years without a corresponding increase in FDI.
It is also important to consider the difference in the institutional qualities in each state and how this may impact the ability of companies to absorb risks of operating in these areas. For example, where Mexico City has high levels of FDI and the highest level of corruption and significant violence (Figure 1), we may consider that its status as the capital may contribute to differences in institutional capacity.
These contrasting trends suggest that the relationship between corruption and investment outcomes cannot be explained through investment and corruption data alone. Taken together, these figures illustrate that aggregate indicators alone are insufficient for assessing investment attractiveness. Furthermore, sector-specific factors, firm size, and the need to incorporate more localised data may capture differences between municipalities and cities.
This reflects the reality that investors consider a broader combination of economic opportunities, institutional capacity, infrastructure, and long-term strategic considerations, despite the challenges criminality poses. Political risk assessments must also account for the rapidly evolving nature of organised crime dynamics. One example is the current administration’s continued use of the Kingpin Strategy (the capture or removal of organised crime leaders). Previous research has associated this approach with criminal fragmentation, increased violence and local instability (International Crisis Group, n.d.).
Conclusion
Overall, these figures should not be interpreted as definitive measures of investment attractiveness. State-level indicators aggregate diverse local realities and cannot fully capture variation between municipalities, sectors, or business environments. Moreover, corruption data reflects only reported incidents and is therefore unlikely to represent its full extent.
Publicly available political risk indicators should therefore be viewed as a starting point rather than a comprehensive assessment. Investors should combine quantitative indicators with local expertise, rigorous country analysis, and engagement with regional partners and trusted local counterparts capable of identifying risks and opportunities that are not immediately visible through state-level data alone.
The experiences of Mexico City, Nuevo León, and Jalisco illustrate that investment patterns do not correspond neatly with indicators of corruption or violence. State-level indicators provide an important foundation for political risk assessment, but effective investment decisions ultimately depend on combining quantitative evidence with detailed qualitative analysis and local knowledge.
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