Essays on the political economy of development in Colombia

Abstract

This thesis consists of three essays on the political economy of development and focuses on topics related to democratization, redistribution and conflict. It studies one the largest countries in Latin America, and examines mostly his history during the 20th century. The first chapter, Buying off the Revolution: Evidence from the Colombian National Peasant Movement, 1957-1985, studies the relationship between democratization and redistribution during periods of revolutionary threats. Far from causing an increase in broad redistribution (e.g. social spending), I show that the state organization of a social movement that extends the political rights of the threatening group can be used to identify rebel leaders and provide private goods to them, in return for preventing social unrest and demobilizing their supporters. I study the context of the organization by the state of the most important social movement in Colombian history -the National Peasant Movement (ANUC)- during the decades of a threat of Communist revolution (1957-1985), when the government gave ANUC direct political participation in the executive branch and economic support. Using three newly digitized data set of the Colombian municipalities, I find that this reform did not lead to higher broad redistribution towards the peasantry but it led to an increase in targeted redistribution in terms of public jobs and lands. By matching the names of the peasant leaders to the beneficiaries of the land reform, evidence suggests that peasant leaders disproportionally benefited from land reform and that targeted redistribution towards the peasant leaders was a mechanism to restrain the Communist threat. Finally, I find suggestive evidence that buying off the rebel leaders was an effective counter-revolutionary strategy as it led to less revolutionary activities after the support to ANUC was terminated (1972-1985). The second chapter, Roads or Schools? Political Budget Cycles with different types of also studies one form of democratization: the franchise extension. It uses a new Colombian data set (1830-2000), to analyze how changes in the electoral legislation with regard to the characteristics of voters (in terms of education and income levels) have affected fiscal policy in election years. In line with economic theory, I show that after the male universal suffrage law was reformed in 1936 the composition of the expenditure shifted towards social spending (like education, health, and welfare benefits) but there was a decrease in spending on infrastructure and investment projects (like roads). Consistent with the literature, I also find: 1.The timing and the size of the political budget cycles changed after 1936 and 2. After 1936 there was a shift in the funding mechanisms from indirect tax revenues to more debt. In addition to democratization and redistribution, the third chapter examines the causes of the civil conflict in Colombia. The third chapter the agrarian origins of civil conflict in Colombia, co-authored with Fabio Sanchez, investigates the impact of land dispossessions by landlords on the origin of the civil conflict in Colombia. The study exploits variation in floods to identify how peasants’ land dispossessions during the export boom (1914-1946) determine the rise of rural guerrilla movements and the consolidation of their rebel activities. It uses a novel municipal-level dataset on natural disasters and land dispossession, and documents that municipalities experiencing floods during the years 1914-1946 were substantially more likely to have land dispossessions than municipalities where floods was not severe. Floods reduced temporarily the conditions of the land and its value, facilitating the dispossession of the peasants of their lands by large landowners. Using a matching-pair instrumental variable approach, we show that the historical dispossession of lands by landlords that led to the rise of peasant grievances is associated with the presence of the rural guerrilla movement -The Revolutionary Forces of Colombia (FARC)- during the first stage of the Colombian civil conflict. We propose two mechanisms through which previous land dispossessions facilitated the emergence of rebel armed groups and use a mediation analysis to test the indirect effects. On the one hand, exposure to previous civil wars gave military training and access to weapons and military experience to the rural population that likely created incentives for the formation of rebel groups. On the other hand, the ideological politics of rebellion by the Communist party exacerbated the grievances and helped to the emergence of rebel armed groups.