IDEAS home Printed from https://ideas.repec.org/p/idb/wpaper/3033.html
   My bibliography  Save this paper

Oil, Coffee and the Dynamic Commons Problems in Colombia

Author

Listed:
  • Mauricio Cardenas
  • Zeinab Partow

Abstract

The dynamic commons problem arises when different groups in society engage in intense redistributive activity as a result of an export boom. This paper analyzes the role that institutions play in ameliorating that problem in the case of coffee and oil in Colombia. The paper presents a model that rationalizes the existence of a federation of coffee producers that effectively reduces inefficient redistribution to other sectors of society. According to the empirical evidence we find that domestic coffee prices have been unaffected by political factors, so that in practice appropriation of coffee rents does not depend on electoral and partisan cycles. The case of oil is substantially different. Here, rents are claimed by a large number of divided agents. According to the model, one feasible solution to the dynamic commons problem when the fiscal structure is not unitary is to impose a set of rules that restrict appropriations by different groups during windfalls. The major cost of this solution, embodied in the Oil Stabilization Fund, is the total loss of flexibility.

Suggested Citation

  • Mauricio Cardenas & Zeinab Partow, 1998. "Oil, Coffee and the Dynamic Commons Problems in Colombia," Research Department Publications 3033, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:3033
    as

    Download full text from publisher

    File URL: http://www.iadb.org/research/pub_hits.cfm?pub_id=R-335&pub_file_name=pubR-335.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alesina, Alberto & Sachs, Jeffrey, 1988. "Political Parties and the Business Cycle in the United States, 1948-1984," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(1), pages 63-82, February.
    2. Hibbs, Douglas A., 1977. "Political Parties and Macroeconomic Policy," American Political Science Review, Cambridge University Press, vol. 71(4), pages 1467-1487, December.
    3. Robert H. Bates, 1998. "Open-Economy Politics: The Political Economy of the World Coffee Trade," Economics Books, Princeton University Press, edition 1, volume 1, number 6067.
    4. Bevan, D L & Collier, P & Gunning, J W, 1987. "Consequences of a Commodity Boom in a Controlled Economy: Accumulation and Redistribution in Kenya 1975-83," The World Bank Economic Review, World Bank, vol. 1(3), pages 489-513, May.
    5. Alberto Alesina, 1988. "Macroeconomics and Politics," NBER Chapters, in: NBER Macroeconomics Annual 1988, Volume 3, pages 13-62, National Bureau of Economic Research, Inc.
    6. Levy, Brian & Spiller, Pablo T, 1994. "The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunications Regulation," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(2), pages 201-246, October.
    7. Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-1231, December.
    8. Masao Ogaki & Jonathan D. Ostry & Carmen M. Reinhart, 1996. "Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 38-71, March.
    9. Cardenas, Mauricio, 1994. "Stabilization and redistribution of coffee revenues: A political economy model of commodity marketing boards," Journal of Development Economics, Elsevier, vol. 44(2), pages 351-380, August.
    10. Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(1), pages 1-16.
    11. Roberto Junguito, 1996. "The management of coffee bonanzas and crisis: political economy issues," Borradores de Economia 3610, Banco de la Republica.
    12. Bevan, D L & Collier, P & Gunning, J W, 1989. "Fiscal Response to a Temporary Trade Shock: The Aftermath of the Kenyan Coffee Boom," The World Bank Economic Review, World Bank, vol. 3(3), pages 359-378, September.
    13. Lane, Philip R & Tornell, Aaron, 1996. "Power, Growth, and the Voracity Effect," Journal of Economic Growth, Springer, vol. 1(2), pages 213-241, June.
    14. Roberto Junguito, 1996. "The Management of Coffee: Bonanzas and Crisis: Political Economy Issues," Borradores de Economia 053, Banco de la Republica de Colombia.
    15. Masao Ogaki & Jonathan D. Ostry & Carmen M. Reinhart, 1996. "Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 38-71, March.
    16. José Antonio Ocampo, 1989. "Ciclo Cafetero y comportamiento macroeconómico en Colombia, 1940 - 1987," Coyuntura Económica, Fedesarrollo, vol. 19(3), pages 125-158, October.
    17. Roberto Junguito B., 1996. "The Management Of Coffee: Bonanzas And Crisis: Political Economy Issues," Borradores de Economia 3611, Banco de la Republica.
    18. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    19. Alesina, Alberto, 1988. "Credibility and Policy Convergence in a Two-Party System with Rational Voters," American Economic Review, American Economic Association, vol. 78(4), pages 796-805, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lane, Philip R. & Tornell, Aaron, 1998. "Why aren't savings rates in Latin America procyclical?," Journal of Development Economics, Elsevier, vol. 57(1), pages 185-199, October.
    2. Mauricio Cárdenas & Roberto Junguito B. & Mónica Pachón B., 2006. "Political Institutions and Policy Outcomes in Colombia : the Effects of the 1991 Constitution," Coyuntura Económica, Fedesarrollo, June.
    3. Juan Carlos Jaramillo & Roberto Steiner & Natalia Salazar Ferro, 1999. "La economía política de la política cambiaria en Colombia," Coyuntura Económica, Fedesarrollo, June.
    4. Li, Xile & Saghaian, Sayed, 2013. "An Empirical Comparison of Coffee Price Transmission in Vietnam and Colombia," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150625, Agricultural and Applied Economics Association.
    5. Gabriel Angarita Tovar, 2017. "Choques de precios y elecciones: el café y la democracia en Colombia," Documentos CEDE 15608, Universidad de los Andes, Facultad de Economía, CEDE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482, Elsevier.
    2. Vítor Castro & Rodrigo Martins, 2015. "Budget, expenditures composition and political manipulation: Evidence from Portugal," NIPE Working Papers 4/2015, NIPE - Universidade do Minho.
    3. V�tor Castro & Rodrigo Martins, 2016. "Are there political cycles hidden inside government expenditures?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(1), pages 34-37, January.
    4. César Martinelli & John Duggan, 2014. "The Political Economy of Dynamic Elections: A Survey and Some New Results," Working Papers 1403, Centro de Investigacion Economica, ITAM.
    5. Rebecca Hellerstein, 2007. "Is There a Dead Spot? New Evidence on FOMC Decisions Before Elections," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(6), pages 1411-1427, September.
    6. Price, Simon, 1997. "Political Business Cycles and Macroeconomic Credibility: A Survey," Public Choice, Springer, vol. 92(3-4), pages 407-427, September.
    7. Ganesh Manjhi & Meeta Keswani Mehra, 2019. "Dynamics of Political Budget Cycle," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(1), pages 135-158, March.
    8. Vítor Castro & Rodrigo Martins, 2015. "Budget, expenditures composition and political manipulation: Evidence from Portugal," NIPE Working Papers 4/2015, NIPE - Universidade do Minho.
    9. repec:nip:nipewp:04/2015 is not listed on IDEAS
    10. Juan Carlos Berganza, 1998. "Relationships Between Politicians and Voters Through Elections: A Review Essay," Working Papers wp1998_9809, CEMFI.
    11. Kouvavas, Omiros, 2013. "Political Budget Cycles Revisited, the Case for Social Capital," MPRA Paper 57504, University Library of Munich, Germany, revised 15 Sep 2013.
    12. Beate Jochimsen & Robert Nuscheler, 2011. "The political economy of the German Lander deficits: weak governments meet strong finance ministers," Applied Economics, Taylor & Francis Journals, vol. 43(19), pages 2399-2415.
    13. Foremny, Dirk & Freier, Ronny & Moessinger, Marc-Daniel & Yeter, Mustafa, 2014. "Overlapping political budget cycles in the legislative and the executive," ZEW Discussion Papers 14-099, ZEW - Leibniz Centre for European Economic Research.
    14. Laopodis, Nikiforos T. & Merika, Anna A. & Triantafillou, Annie, 2016. "Unraveling the political budget cycle nexus in Greece," Research in International Business and Finance, Elsevier, vol. 36(C), pages 13-27.
    15. Reichenvater, Arno, 2007. "Business Cycles, Political Incentives and the Macroeconomy: Comparison of Models," MPRA Paper 5527, University Library of Munich, Germany.
    16. Vítor Castro & Rodrigo Martins, 2018. "The Electoral Dynamics of Human Development," Journal of Development Studies, Taylor & Francis Journals, vol. 54(1), pages 191-211, January.
    17. Michael Berlemann & Gunther Markwardt, 2007. "Unemployment and Inflation Consequences of Unexpected Election Results," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(8), pages 1919-1945, December.
    18. Berlemann, Michael & Markwardt, Gunther, 2003. "Partisan cycles and pre-electoral uncertainty," Dresden Discussion Paper Series in Economics 01/03, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    19. Efthyvoulou, Georgios, 2011. "Political cycles under external economic constraints: Evidence from Cyprus," Journal of Economics and Business, Elsevier, vol. 63(6), pages 638-662.
    20. Troeger, Vera & Schneider, Christina J., 2012. "Strategic Budgeteering and Debt Allocation," CAGE Online Working Paper Series 85, Competitive Advantage in the Global Economy (CAGE).
    21. Berger, Helge & Woitek, Ulrich, 1997. "How opportunistic are partisan German central bankers: Evidence on the Vaubel hypothesis," European Journal of Political Economy, Elsevier, vol. 13(4), pages 807-821, December.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idb:wpaper:3033. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Felipe Herrera Library (email available below). General contact details of provider: https://edirc.repec.org/data/iadbbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.