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The Perils of High-Powered Incentives: Evidence from Colombia's False Positives

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Listed:
  • Daron Acemoglu
  • Leopoldo Fergusson
  • James Robinson
  • Dario Romero
  • Juan F. Vargas

Abstract

We investigate the use of high-powered incentives for the Colombian military and show that this practice produced perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as "false positives"). There were significantly more false positives during the period of high-powered incentives in municipalities with weaker judicial institutions and where a higher share of brigades were commanded by colonels, who have stronger career concerns than generals. In municipalities with a higher share of colonels, the high-powered incentives period also coincided with a worsening of local judicial institutions and no discernible improvement in overall security.

Suggested Citation

  • Daron Acemoglu & Leopoldo Fergusson & James Robinson & Dario Romero & Juan F. Vargas, 2020. "The Perils of High-Powered Incentives: Evidence from Colombia's False Positives," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 1-43, August.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:3:p:1-43
    DOI: 10.1257/pol.20180168
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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