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

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Author Info
Joshua D. Angrist (MIT and NBER)
Adriana D. Kugler (University of Houston, NBER, CEPR, and IZA)

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Abstract

We study the consequences of an exogenous upsurge in coca prices and cultivation in Colombia, where most coca leaf is now harvested. 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 rural areas that saw accelerated coca production subsequently became considerably more violent, while urban areas were affected little. These findings are consistent with the view that the Colombian civil conflict is fueled by the financial opportunities that coca provides and that rent-seeking by combatants limits the economic gains from coca. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/rest.90.2.191
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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 90 (2008)
Issue (Month): 2 (03)
Pages: 191-215
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Handle: RePEc:tpr:restat:v:90:y:2008:i:2:p:191-215

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Angrist, Joshua & Kugler, Adriana D., 2005. "Rural Windfall or a New Resource Curse? Coca, Income and Civil Conflict in Colombia," CEPR Discussion Papers 5324, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 487-500, February. [Downloadable!] (restricted)
  3. Alberto Abadie, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," NBER Working Papers 10859, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Massimo Guidolin & Eliana La Ferrara, 2006. "Diamonds are forever, wars are not. Is conflict bad for private firms?," Working Papers 2005-004, Federal Reserve Bank of St. Louis. [Downloadable!]
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  5. Jairo Núñez & Fabio Sánchez Torres, 2000. "Geography and Economic Development in Colombia: A Municipal Approach," RES Working Papers 3107, Inter-American Development Bank, Research Department. [Downloadable!]
  6. Kugler, Adriana & Kugler, Maurice, 2003. "The Labor Market Effects of Payroll Taxes in a Middle-Income Country: Evidence from Colombia," IZA Discussion Papers 852, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Arvind Subramanian & Xavier Sala-i-Martin, 2003. "Addressing the Natural Resource Curse: An Illustration from Nigeria," IMF Working Papers 03/139, International Monetary Fund. [Downloadable!]
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  8. Alan B. Krueger & Jitka Maleckova, 2002. "Education, Poverty, Political Violence and Terrorism: Is There a Causal Connection?," NBER Working Papers 9074, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Carrington, William J, 1996. "The Alaskan Labor Market during the Pipeline Era," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 186-218, February. [Downloadable!] (restricted)
  10. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  11. Eric Edmonds & Nina Pavcnik, 2004. "International Trade and Child Labor: Cross-Country Evidence," NBER Working Papers 10317, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Ana María Díaz & Fabio Sánchez, 2004. "A Geography Of Illicit Crops (Coca Leaf) And Armed Conflict In Colombia," DOCUMENTOS CEDE 001917, UNIVERSIDAD DE LOS ANDES-CEDE. [Downloadable!]
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  13. Dan Black & Terra McKinnish & Seth Sanders, 2005. "The Economic Impact Of The Coal Boom And Bust," Economic Journal, Royal Economic Society, vol. 115(503), pages 449-476, 04. [Downloadable!] (restricted)
  14. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2004. "The Effect of Structural Reforms on Productivity and Profitability Enhancing Reallocation: Evidence from Colombia," NBER Working Papers 10367, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Steiner, Roberto, 1998. "Colombia's income from the drug trade," World Development, Elsevier, vol. 26(6), pages 1013-1031, June. [Downloadable!] (restricted)
  16. Collier, Paul & Hoeffler, Anke & Soderbom, Mans, 2001. "On the duration of civil war," Policy Research Working Paper Series 2681, The World Bank. [Downloadable!]
  17. Paul Collier & Anke Hoeffler, 2004. "Greed and Grievance in Civil War," Development and Comp Systems 0409007, EconWPA. [Downloadable!]
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  18. Herschel I. Grossman & Daniel Mejia, 2005. "The War Against Drug Producers," NBER Working Papers 11141, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Ricardo Hausmann & Roberto Rigobon, 2003. "An Alternative Interpretation of the 'Resource Curse': Theory and Policy Implications," NBER Working Papers 9424, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Mauricio Cárdenas Santa María, 2007. "Economic Growth in Colombia: a Reversal of “Fortune”?," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 002403, FEDESARROLLO. [Downloadable!]
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  22. Gaviria, Alejandro, 2000. "Increasing returns and the evolution of violent crime: the case of Colombia," Journal of Development Economics, Elsevier, vol. 61(1), pages 1-25, February. [Downloadable!] (restricted)
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  23. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, 01. [Downloadable!] (restricted)
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  24. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Oeindrila Dube & Juan F. Vargas, 2006. "Resource Curse in Reverse: The Coffee Crisis and Armed Conflict in Colombia," Royal Holloway, University of London: Discussion Papers in Economics 06/05, Department of Economics, Royal Holloway University of London, revised Dec 2006. [Downloadable!]
    Other versions:
  2. Joshua D. Angrist & Adriana D. Kugler, 2007. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," IZA Discussion Papers 2790, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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