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Economic growth in Colombia: A reversal of Fortune

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  • Mauricio CARDENAS SANTAMARIA

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Abstract

Colombia’s annual GDP growth fell to an average of 3% between 1980 and 2000 from 5% between 1950 and 1980. The sources-of-growth decomposition shows that this reversal can be accounted entirely by changes in productivity. Indeed, between 1960 and 1980 productivity gains increased output per capita by nearly 1% per year. Since 1980, productivity losses have reduced output per capita at about the same rate. The time series analysis suggests that the implosion of productivity is related to the increase in criminality which has diverted capital and labor to unproductive activities. In turn, the rise in crime has been the result of rapid expansion in drug-trafficking activities, which erupted around 1980. This explanation is supported by cross-country evidence that shows that Colombia is clear outlier in terms of conflict and fragmentation, and suggests that high crime is associated with low productivity.

Suggested Citation

  • Mauricio CARDENAS SANTAMARIA, 2002. "Economic growth in Colombia: A reversal of Fortune," ARCHIVOS DE ECONOMÍA 002402, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
  • Handle: RePEc:col:000118:002402
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    Cited by:

    1. Carlos Humberto Ortiz Quevedo, 2003. "Learning-By-Doing, Government Spending And Economic Growth: A Model A La Matsu Yama-Barro," DOCUMENTOS DE TRABAJO-CIDSE 003136, UNIVERSIDAD DEL VALLE - CIDSE.
    2. Joshua D. Angrist & Adriana D. Kugler, 2008. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 191-215, May.
    3. Ortiz, Carlos Humberto & Uribe, José Ignacio & Vivas, Harvy, 2010. "Empleo formal y empresas modernas," PERFIL DE COYUNTURA ECONÓMICA, UNIVERSIDAD DE ANTIOQUIA - CIE, November.
    4. Salomón Kalmanovitz & Enrique López, 2003. "Patrones de Desarrollo y Fuentes de Crecimiento de la Agricultura," BORRADORES DE ECONOMIA 003315, BANCO DE LA REPÚBLICA.
    5. Rony Pshisva & Gustavo A. Suarez, 2006. "'Captive markets': the impact of kidnappings on corporate investment in Colombia," Finance and Economics Discussion Series 2006-18, Board of Governors of the Federal Reserve System (U.S.).
    6. Ricardo Rocha & Hermes Martinez, 2003. "Pauvreté, crime et croissance en Colombie : disparités régionales," Revue Tiers Monde, Programme National Persée, vol. 44(176), pages 803-828.
    7. Ortiz, Carlos Humberto, 2010. "The War on Drugs is Counterproductive, Once Again," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE, January.
    8. Cerro, Ana María & Rodríguez Andrés, Antonio, 2010. "The Effect of Crime on the Job Market: An ARDL approach to Argentina," MPRA Paper 44457, University Library of Munich, Germany.
    9. Grilli, Enzo, 2005. "Political economy and economic development in Latin America in the second half of the 20th century," Journal of Policy Modeling, Elsevier, vol. 27(1), pages 1-31, February.
    10. World Bank, 2005. "Colombia : Public Expenditure Review," World Bank Other Operational Studies 8559, The World Bank.
    11. Alvaro J. Riascos & Juan F. Vargas, 2011. "Violence and growth in Colombia: A review of the quantitative literature," Economics of Peace and Security Journal, EPS Publishing, vol. 6(2), pages 15-20, July.
    12. Roberto Steiner & Irene Clavijo & Natalia Salazar, 2008. "Colombia´s Efforts at Achieving Inclusive and Sustainable Growth: The Road Traveled and the Challenges Ahead," INFORMES DE INVESTIGACIÓN 009058, FEDESARROLLO.
    13. Gonzalez, Maria A & Lopez, Rigoberto A, 2007. "Political Violence and Farm Household Efficiency in Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 55(2), pages 367-392, January.
    14. Adriana Camacho & Catherine Rodriguez, 2013. "Firm Exit and Armed Conflict in Colombia," Journal of Conflict Resolution, Peace Science Society (International), vol. 57(1), pages 89-116, February.
    15. Juan Alberto Fuentes, 2005. "Violent Conflict and Human Development in Latin America: The Cases of Colombia, El Salvador and Guatemala," Human Development Occasional Papers (1992-2007) HDOCPA-2005-10, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    16. Polanía Reyes Sandra Viviana, 2005. "Capital social e ingreso de los hogares del sector urbano en Colombia," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, July.
    17. Alexander Cotte Poveda, 2006. "Crecimiento, Desigualdad Y Pobreza: Un Análisis De La Violencia En Colombia," SERIE DE DOCUMENTOS EN ECONOMÍA Y VIOLENCIA 002233, CENTRO DE INVESTIGACIONES EN VIOLENCIA, INSTITUCIONES Y DESARROLLO ECONÓMICO (VIDE).
    18. Julián VILLAMIL SANCHEZ, 2016. "Cálculo de la Productividad Sectorial en Colombia con Herramientas Insumo-Producto," ARCHIVOS DE ECONOMÍA 014585, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    19. Carlos Humberto Ortiz, 2009. "La desaceleración económica colombiana: se cosecha lo que se siembra," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 11(21), pages 107-137, July-Dece.
    20. Mauricio SANTAMARIA SALAMANCA & Norberto ROJAS DELGADILLO & Gustavo HERNÁNDEZ DIAZ, 2013. "Crecimiento económico y Conflicto Armado en Colombia," ARCHIVOS DE ECONOMÍA 011201, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    21. Djumashev, Ratbek & Abdullaev, Bekzod, 2017. "Crime, Transition, and Growth," MPRA Paper 80842, University Library of Munich, Germany.
    22. Boris Branisa & Adriana Cardozo, 2009. "Revisiting the Regional Growth Convergence Debate in Colombia Using Income Indicators," Ibero America Institute for Econ. Research (IAI) Discussion Papers 194, Ibero-America Institute for Economic Research, revised 21 Aug 2009.
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    More about this item

    Keywords

    Economic growth;

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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