Portal Red Investigadores de Economía

Coca eradication has been aggressively pursued by the Colombian government to reduce the amount of land that agricultural households in the Andean country devote to this illegal crop. However, little work has been done to assess the causal effect of the policy on land allocation decisions. I use a six year panel of observations covering the entire country for the years 2001-2006 to estimate this effect at the municipality level, exploiting exogenous sources of variation in eradication and taking an IV approach to estimation. The instruments are derived from changes in the expected cost of coca eradication as crews get far from the zone where Antinarcotics Police helicopters can protect them from the illegal armed groups that try to shoot them down. IV estimation shows that the causal effect of a one percent increase in eradication is slightly less than a one percent increase in coca cultivation.

Estimating the Causal Effect of Forced Eradication on Coca Cultivation in Colombian Municipalities