The Mexican drug war, a civil war really, is a clear case of a chronic lack of vision. Drastically underpaid police easily give into corruption by gangsters flush with practically unlimited cash. Not all of them, but obviously far too many of them. Sure, the drug war (in the US and overall) has failed. Sure, the demand will not go away. But come on, isn't there someone involved who can get a little creative?
People will make some effort to do the right thing. This tendency is easily washed away by large discrepancies of life, liberty, and happiness. In this case, mostly life and happiness: Avoiding murder while getting much more money. How do you combat that? Change the incentives. Directly compete with the incentives creating the problem. Additionally, play up all the social pressure you can.
How might that work in this case? How about something like whistleblower rewards? Seems like that works pretty well: [1]. In zones that pass a threshold, allow individuals and, to some extent, everyone in the police department to benefit from taking down drug or similar operations. Divide everything captured. You have to guard against police corruption going the other way: Taking from innocents or disproportionately. But the situation in many areas is far from that problem.
Second, do more than show the result of gang killings. Make it terribly uncool, offensive, and permanently scorned to participate in murderous gangs, drug running, etc. Use every angle to expose, shame, and social engineer the killers, gangs, and everyone around them. Create an anti-social network to out criminals.
Third, get evidence. Current technology means you could wire whole areas, even small towns, highways, etc. with wireless Internet surveillance that captures and transmits video and other telemetry. When good Internet access isn't available, use distributed mesh nets and replication to make it hard to prevent sharing. Need to search large volumes manually? Crowd source it to the Internet and thousands will jump in. Add a prize for finding winning evidence. Make it a game show in China. Get creative!
Fourth, seriously start bringing Mexico, and other third world-ish countries into the modern age of working democracies. Be strict and aggressive about justice. Honor property and other rights. Compensate victims from any assets that a crime syndicate has. Do whatever is necessary to create, invite, and nurture businesses. While you don't need to inflate salaries all the way to first world levels, they should be sufficient to live well. Transform whatever is needed in the community or country to make that true. Inexpensive and high-quality education, transportation, safety, food, and products don't always need to be expensive if the situation is engineered to be as efficient as possible.
[1] http://www.guardian.co.uk/business/2010/oct/27/glaxosmithkline-whistleblower-comment
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