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Supply-Side Drug Enforcement and Economic Development

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Abstract

Do coercive efforts to dismantle illicit economic activity promote development, or can they inadvertently undermine it? We study this question in the context of Colombia’s large-scale aerial eradication of coca crops using glyphosate. We digitize detailed geographic data on sprayed areas and exploit quasi-random variation in exposure to eradication flights to estimate effects on human capital and socioeconomic outcomes. In the short term, aerial eradication increases school dropout, primarily through negative income shocks to affected households. Over time, exposed villages exhibit lower educational attainment, higher child labor, earlier marriage, and poorer living conditions even after spraying ceased.

Suggested Citation

  • Horta-Saenz, Daniela & Tami-Patiño, Anderson, 2026. "Supply-Side Drug Enforcement and Economic Development," Discussion Paper Series in Economics 5/2026, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2026_005
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    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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