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One step ahead of the law: The net effect of anticipation and implementation of Colombia’s illegal crops substitution program

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  • Ladino, Juan Felipe
  • Saavedra, Santiago
  • Wiesner, Daniel

Abstract

Pre-announced policies often generate unintended consequences due to individuals’ acting to take advantage of the policy conditions. Little is known about the extent to which unintended consequences from the early announcement of a policy can be larger than the implementation effect, especially in contexts of weak state capacity. We use detailed 1 km grid square data on coca cultivation to estimate the net effect of the announcement and implementation of coca crop substitution payments in Colombia. Our fine-grain data also enable us to estimate geographical spillovers of the program to non-targeted neighboring areas. Using a difference-in-differences empirical strategy, we find that program recipients reduced coca acreage. Surprisingly, the reduction in neighboring grid areas is of a similar magnitude. However, the effectiveness was reduced by half, because farmers increased coca cultivation in order to be eligible for the program after the announcement and before implementation. But the policy’s net effect is negative: due to weak state capacity, the program could not be implemented in every region of the country.

Suggested Citation

  • Ladino, Juan Felipe & Saavedra, Santiago & Wiesner, Daniel, 2021. "One step ahead of the law: The net effect of anticipation and implementation of Colombia’s illegal crops substitution program," Journal of Public Economics, Elsevier, vol. 202(C).
  • Handle: RePEc:eee:pubeco:v:202:y:2021:i:c:s0047272721001341
    DOI: 10.1016/j.jpubeco.2021.104498
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    References listed on IDEAS

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    1. Fabio Sánchez Torres & Ana María Díaz, 2005. "Los Efectos Del Conflicto Armado En El Desarrollo Social Colombiano, 1990-2002," Documentos CEDE 3167, Universidad de los Andes, Facultad de Economía, CEDE.
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    Cited by:

    1. Marín Llanes, Lucas & Fernández Sierra, Manuel & Vélez Lesmes, María Alejandra & Martínez González, Eduard & Murillo Sandoval, Paulo, 2024. "Coca-Based Local Growth and Its Socio-Economic Impact in Colombia," Documentos CEDE 21186, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Bruno De Borger & Amihai Glazer & Stef Proost, 2021. "Rational Drivers and the Choice Between Congestion Tolls and Tradeable Permits: A Political Economy Model," CESifo Working Paper Series 8821, CESifo.
    3. Carvajal, Hernán, 2023. "Efectos de la suspensión de las aspersiones aéreas con glifosato sobre la deserción escolar en Colombia," Documentos CEDE 20307, Universidad de los Andes, Facultad de Economía, CEDE.
    4. Lucas Marín Llanes, 2020. "Unintended Consequences of Alternative Development Programs: Evidence From Colombia's Illegal Crop Substitution," Documentos CEDE 18468, Universidad de los Andes, Facultad de Economía, CEDE.
    5. Diego A. Martin, 2023. "The Impact of a Rise in Expected Income on Child Labor: Evidence From Coca Production in Colombia," Growth Lab Working Papers 217, Harvard's Growth Lab.
    6. Diego A. Martin, 2023. "The Impact of a Rise in Expected Income on Child Labor: Evidence From Coca Production in Colombia," CID Working Papers 150a, Center for International Development at Harvard University.

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    More about this item

    Keywords

    Policy announcement; Unintended consequences; Illegal markets; Coca; Colombia;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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