Criminal governance and public resources: The case of paramilitaries and health care provision in Colombia

Non-state armed actors can shape provision of public goods by impeding provision, becoming providers themselves, or taking control of the means for provision. While the literature is prolific at analyzing the former two channels, the third one is underexplored. How does criminal governance affect public goods provisioning via state capture? And do these dynamics facilitate the survival of non-state armed groups? This paper seeks to answer these questions. I argue that institutional cooptation by non-state armed actors (NSAs) affects public goods provisioning negatively in contexts of institutional decentralization. In these circumstances, public resource transfers can strengthen rather than weaken NSAs. To test my argument, I analyze the Colombian case, where criminal insurgencies took control of and diverted public health funds toward their pockets. Using data on health care providers, as well as the presence of NSAs at the municipal level, I show via two-way fixed effects models that municipalities experiencing paramilitary cooptation see a decrease in public health care provision. Similarly, public resource transfers decrease paramilitary demobilizations. This has important implications for the evaluation of decentralization as a strategy for political stabilization, peacekeeping, and development in fragile contexts, as well as for understanding the impact of public spending in strengthening rather than weakening NSAs.