Unpacking the peace dividend: A subnational analysis of the relationship between business, peace, and economic growth in nine Colombian cities

After the signing of a peace agreement in Colombia 7 years ago, expectations of a peace dividend for the private sector ran high. To what extent has this dividend materialized, and what have been the experiences of companies in different regions and cities of the economy? To evaluate the impact of the peace agreement on key indicators, we conducted a subnational analysis in post-agreement Colombia. We examined nine cities and created a model to determine the relationship between the conflict—represented by the Victimization Risk Index released by the Colombian national victim’s unit—and a business dynamic variable. We found that the cities presenting a higher VRI tend to have lower business dynamic scores. We paired the findings from our business dynamics model with the results of a survey conducted in 2018 by the Bogotá Chamber of Commerce (CCB). This comparison confirms that the majority of the regions most affected by the conflict had the largest peace dividend both in terms of perception and in reality. Peace will not lift all boats across the country evenly. Policymakers can leverage these insights to ground their expectations and devise more effective policies and interventions capable of navigating the challenges of peacemaking and the opportunities peace can offer the private sector.