Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia

Joshua Angrist and Adriana Kugler

No 2790, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Natural and agricultural resources for which there is a substantial black market, such as coca, opium, and diamonds, appear especially likely to be exploited by the parties to a civil conflict. Even legally traded commodities such as oil and timber have been linked to civil war. On the other hand, these resources may also provide one of the few reliable sources of income in the countryside. In this paper, we study the economic and social consequences of a major exogenous shift in the production of one such resource – coca paste – into Colombia, where most coca leaf is now harvested. Our analysis shows that this shift generated only modest economic gains in rural areas, primarily in the form of increased self-employment earnings and increased labor supply by teenage boys. The results also suggest that the rural areas which saw accelerated coca production subsequently became more violent, while urban areas were affected little. The acceleration in violence is greater in departments (provinces) where there was a pre-coca guerilla presence. Taken together, these findings are consistent with the view that the Colombian civil conflict is fueled by the financial opportunities that coca provides, and that the consequent rent-seeking activity by combatants limits the economic gains from coca cultivation.

Keywords: civil war; economic shocks; rural development; illegal drugs (search for similar items in EconPapers)
JEL-codes: O13 Q34 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2007-05
New Economics Papers: this item is included in nep-agr, nep-dev, nep-ene, nep-his and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published in: Review of Economics and Statistics, 2008, 90 (2), 191-215

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Related works:
Journal Article: Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia (2008)
Working Paper: Rural Windfall or a New Resource Curse? Coca, Income and Civil Conflict in Colombia (2005)
Working Paper: Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia (2005)
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