Resource curse in reverse: The coffee crisis and armed conflict in Colombia

Oeindrila Dube and Juan Vargas

No 3460, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: Between 1998 and 2003 production increases in Brazil and Vietnam drove down the price of coffee by 73 percent in global markets, triggering the international coffee crisis". We examine the effect of this exogenous price shock on Colombia´s civil war, exploring whether politically-motivated violence presented different dynamics in the coffee -growing regions relative to the non- coffee regions, during the pre-crisis and crisis periods. Using a difference-in-differences framework, we find causal evidence that the steep decline in coffee prices substantially increased both the incidence and intensity of Colombia´s civil war. We also propose a simple model linking the price shock to violence and empirically examine the relative importance of three potential mechanisms. While crop substitution from coffee to coca explains very little of the variation, a disproportionate increase in poverty in coffee areas is associated with greater violence, as is a lower state capacity."

Keywords: Colombia; Conflict; Coffee; Crisis; Resource; Curse; Difference; in; Differences (search for similar items in EconPapers)
JEL-codes: D74 Q1 (search for similar items in EconPapers)
Pages: 53
Date: 2006-12-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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https://repositorio.uniandes.edu.co/bitstream/handle/1992/40998/dcede2006-46.pdf

Related works:
Working Paper: Resource Curse in Reverse: The Coffee Crisis and Armed Conflict in Colombia (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:003460

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