"Pancho and Lefty" is a folk song written by Townes Van Zandt. Van Zandt first recorded it for his 1972 album, The Late Great Townes Van Zandt. Emmylou Harris then covered the song for her 1977 album, Luxury Liner and the song became a number one country hit in 1983 when Merle Haggard and Willie Nelson adopted it as the title track of their duet album Pancho & Lefty.
The song tells the story of a Mexican bandit named Pancho and a more enigmatic character, Lefty. The song tells of Pancho's death and implies that he was betrayed by his associate Lefty who was paid off by the Mexican federales.
Although many people initially assume that the song is about the famous Mexican revolutionary Pancho Villa, Van Zandt has denied this, and the lyrics are not easily reconciled with the historic details of Villa's life and death. - wiki