Reversal of Fortune

Mauricio Cardenas

No 3471, Investigación Económica en Colombia from Fundación Pondo

Abstract: Colombia’s annual GDP growth fell to an average of 3% between 1980 and 2000 from 5% between 1950 and 1980. The sources-of-growth decomposition shows that this reversal can be accounted entirely by changes in productivity. Indeed, between 1960 and 1980 productivity gains increased output per capita by nearly 1% per year. Since 1980, productivity losses have reduced output per capita at about the same rate. The time series analysis suggests that the implosion of productivity is related to the increase in criminality which has diverted capital and labor to unproductive activities. In turn, the rise in crime has been the result of rapid expansion in drug-trafficking activities, which erupted around 1980. This explanation is supported by cross-country evidence that shows that Colombia is clear outlier in terms of conflict and fragmentation, and suggests that high crime is associated with low productivity.

Keywords: Economic growth (search for similar items in EconPapers)
JEL-codes: Z13 (search for similar items in EconPapers)
Pages: 40
Date: 2002-03-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.webpondo.org/files/oct_dic/reversal_of_fortune120302.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000100:003471

Access Statistics for this paper

More papers in Investigación Económica en Colombia from Fundación Pondo
Bibliographic data for series maintained by Katherine Aguirre ().