This dissertation provides empirical evidence on the causal relationship between the rule of law and economic development in both directions, taking Mexico as a case study. The first chapter examines the effect of Oportunidades, Mexico's flagship social program, on reporting violence against women to the police. I use specialized survey data to estimate the average treatment effect of additional reports to the police for women who experienced spousal abuse prior to participating in the program. The identification strategy for this chapter consists of two instrumental variables that are based on institutional characteristics of Oportunidades. Findings indicate an increase of 30.2% in the reporting rates as a consequence of receiving Oportunidades. The causality channels include assimilation of women's rights, increasing trust in the police, and changes in the marriage market. Large-scale military conflicts oftentimes disrupt economic development. The second chapter studies the case of the Mexican Drug War for treated states, employing synthetic control methods. To prove causality systematically, I use variation on statewide military operations conducted by the Mexican Army, and the rollout of the war. Findings indicate a decrease in GDP per capita equal to 0.5%. Determinants by which the Mexican Drug War hampered economic development include a proportional reduction in consumption per capita, and a decline in productive investment of at least 0.3%, driven by a drop of 3.2% in commercial credit granted to businesses. The thrid chapter analyzes the effect of drug-related violence on depression among adults in Mexico during Mexican Drug War. The empirical strategy consists of first-differences in aggregate health outcomes at the municipality level before and after the beginning of the conflict. To account for potential migration biases, I use variation on net cocaine supply from Colombia and on federallocal enforcement cooperation. Results suggest an increase of 1.0% in depression among women, for every additional one-standard deviation expansion in drug-related homicide rates. In stark contrast, Mexican men seem largely unaffected by drug-related violence.