Incentives war: the consequences of announcing a substitution policy on coca cultivation in Colombia

Gelvez, Juan D. and Angarita Serrano, Matilde (2024) Incentives war: the consequences of announcing a substitution policy on coca cultivation in Colombia. Journal of Illicit Economies and Development, 5 (1). 47 - 57. ISSN 2516-7227

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Abstract

How do alternative development programs, designed to diminish the presence of illicit crops, might cause unexpected consequences? This article studies how the announcement about an alternative development program, following the signing of the peace agreement in Colombia, resulted in an increase in coca cultivation. Employing a difference-in-differences methodology, this document evaluates the impact of the National Comprehensive Plan for the Substitution of Illicit Crops (PNIS – for its acronyms in Spanish) on the incentives to cultivate coca crops. Our empirical findings show that the announcement of this program led to a substantial average increase of 791 ha of illicit crops per municipality. This increment equates to 40,341 additional hectares, constituting approximately 53% of the overall surge in illicit crop cultivation during the year following the program’s announcement. In our exploration of underlying mechanisms, we discuss the interplay of economic incentives for both coca and non-coca cultivators and the electoral motivations of the FARC political party.

Item Type:	Article
Official URL:	https://jied.lse.ac.uk/
Additional Information:	© 2024 The Author(s)
Divisions:	LSE
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HV Social pathology. Social and public welfare. Criminology
Date Deposited:	04 Mar 2024 15:06
Last Modified:	19 Nov 2024 18:45
URI:	http://eprints.lse.ac.uk/id/eprint/122160

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