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Drugs and Violence in Colombia: a VECM Analysis

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  • Tomás González
  • Ron P Smith

    (Department of Economics, Mathematics & Statistics, Birkbeck)

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    Abstract

    It has been widely argued that the production of illegal drugs, particularly cocaine, has financed guerrilla activity in Colombia. This paper uses quarterly time-series data for Colombia 1994-2005 to examine the interaction between legal agricultural production, illegal agricultural production of drugs and the number of guerrilla attacks. The time series analysis suggests that drug production acts as a weakly exogenous stochastic trend which has a negative effect on legal agricultural production and a positive effect on guerrilla attacks; with a long-run elasticity of attacks to drug production very close to unity.

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    File URL: http://www.ems.bbk.ac.uk/research/wp/PDF/BWPEF0906.pdf
    File Function: First version, 2009
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    Bibliographic Info

    Paper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Birkbeck Working Papers in Economics and Finance with number 0906.

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    Date of creation: Jun 2009
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    Handle: RePEc:bbk:bbkefp:0906

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    1. Timothy J. Besley & Torsten Persson, 2008. "The Incidence of Civil War: Theory and Evidence," NBER Working Papers 14585, National Bureau of Economic Research, Inc.
    2. Blattman, Christopher & Miguel, Edward, 2009. "Civil War," Center for International and Development Economics Research, Working Paper Series qt90n356hs, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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