IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/22617.html
   My bibliography  Save this paper

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

Author

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

Abstract

High-powered incentives for the military and security services have become a common counterinsurgency strategy over the last several decades. We investigate the use of such incentives for members of the Colombian army in the long-running civil war against left-wing guerillas, and show that it produced several perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as ‘false positives’). Exploiting the fact that Colombian colonels have stronger career concerns and should be more responsive to such incentives, we show that there were significantly more false positives during the period of high-powered incentives in municipalities where a higher share of brigades were commanded by colonels and in those where checks coming from civilian judicial institutions were weaker. We further find that in municipalities with a higher share of colonels, the period of high-powered incentives coincided with a worsening of local judicial institutions and no discernible improvement in the overall security situation.

Suggested Citation

  • Daron Acemoglu & Leopoldo Fergusson & James A. Robinson & Dario Romero & Juan F. Vargas, 2016. "The Perils of High-Powered Incentives: Evidence from Colombia's False Positives," NBER Working Papers 22617, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:22617
    Note: POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w22617.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul Oyer, 1998. "Fiscal Year Ends and Nonlinear Incentive Contracts: The Effect on Business Seasonality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 149-185.
    2. Ernesto cárdenas & Edgar Villa, 2013. "La política de seguridad democrática y las ejecuciones extrajudiciales," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 31(71), pages 64-72, June.
    3. Ernesto Dal Bó & Frederico Finan & Martín A. Rossi, 2013. "Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1169-1218.
    4. Daron Acemoglu & Camilo García-Jimeno & James A. Robinson, 2015. "State Capacity and Economic Development: A Network Approach," American Economic Review, American Economic Association, vol. 105(8), pages 2364-2409, August.
    5. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
    6. George Baker & Robert Gibbons & Kevin J. Murphy, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 1125-1156.
    7. Baker, George P, 1992. "Incentive Contracts and Performance Measurement," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 598-614, June.
    8. Ghani, Ashraf & Lockhart, Clare, 2009. "Fixing Failed States: A Framework for Rebuilding a Fractured World," OUP Catalogue, Oxford University Press, number 9780195398618.
    9. Atif Mian, 2008. "Incentives in Markets, Firms, and Governments," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(2), pages 273-306, October.
    10. Matthew Adam Kocher & Thomas B. Pepinsky & Stathis N. Kalyvas, 2011. "Aerial Bombing and Counterinsurgency in the Vietnam War," American Journal of Political Science, John Wiley & Sons, vol. 55(2), pages 201-218, April.
    11. Eli Berman & Jacob N. Shapiro & Joseph H. Felter, 2011. "Can Hearts and Minds Be Bought? The Economics of Counterinsurgency in Iraq," Journal of Political Economy, University of Chicago Press, vol. 119(4), pages 766-819.
    12. Daron Acemoglu & James A. Robinson & Rafael J. Santos, 2013. "The Monopoly Of Violence: Evidence From Colombia," Journal of the European Economic Association, European Economic Association, vol. 11, pages 5-44, January.
    13. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    14. Fearon, James D. & Laitin, David D., 2003. "Ethnicity, Insurgency, and Civil War," American Political Science Review, Cambridge University Press, vol. 97(1), pages 75-90, February.
    15. Esther Duflo & Rema Hanna & Stephen P. Ryan, 2012. "Incentives Work: Getting Teachers to Come to School," American Economic Review, American Economic Association, vol. 102(4), pages 1241-1278, June.
    16. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 843-877.
    17. Sebastian Galiani & Martín A. Rossi & Ernesto Schargrodsky, 2011. "Conscription and Crime: Evidence from the Argentine Draft Lottery," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 119-136, April.
    18. Frederico Finan & Benjamin A. Olken & Rohini Pande, 2015. "The Personnel Economics of the State," NBER Working Papers 21825, National Bureau of Economic Research, Inc.
    19. Dixit, Avinash, 1997. "Power of Incentives in Private versus Public Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 378-382, May.
    20. Abhijit V. Banerjee & Esther Duflo & Rachel Glennerster, 2008. "Putting a Band-Aid on a Corpse: Incentives for Nurses in the Indian Public Health Care System," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 487-500, 04-05.
    21. Leopoldo Fergusson & James A. Robinson & Ragnar Torvik & Juan F. Vargas, 2016. "The Need for Enemies," Economic Journal, Royal Economic Society, vol. 126(593), pages 1018-1054, June.
    22. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, 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. Martin, Diego A. & Romero, Dario A., 2024. "Social distancing and COVID-19 under violence: Evidence from Colombia," Journal of Development Economics, Elsevier, vol. 170(C).
    2. Melissa Dell & Pablo Querubin, 2018. "Nation Building Through Foreign Intervention: Evidence from Discontinuities in Military Strategies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 701-764.
    3. Leopoldo Fergusson & Juan F. Vargas, 2023. "Colombia: Democratic but Violent?," Springer Books, in: Felipe Valencia Caicedo (ed.), Roots of Underdevelopment, pages 285-316, Springer.
    4. Hanming Fang & Chang Liu & Li-An Zhou, 2020. "Window Dressing in the Public Sector: A Case Study of China’s Compulsory Education Promotion Program," NBER Working Papers 27628, National Bureau of Economic Research, Inc.
    5. Thiemo Fetzer & Oliver Vanden Eynde & Austin L Wright, 2024. "Team production on the battlefield: Evidence from NATO in Afghanistan," PSE Working Papers halshs-04610715, HAL.
    6. Harrison, Mark, 2017. "Secrecy and State Capacity: A Look Behind the Iron Curtain," CAGE Online Working Paper Series 312, Competitive Advantage in the Global Economy (CAGE).
    7. Juan Pablo Castilla, 2020. "To Kill a Black Swan: The Credibility Revolution at CEDE, 2000-2018," Documentos CEDE 18366, Universidad de los Andes, Facultad de Economía, CEDE.
    8. Costa-Font, Joan & García-Hombrados, Jorge & Nicińska, Anna, 2024. "Long-lasting effects of indoctrination in school: Evidence from the People’s Republic of Poland," European Economic Review, Elsevier, vol. 161(C).
    9. Samuel Bazzi & Robert A. Blair & Christopher Blattman & Oeindrila Dube & Matthew Gudgeon & Richard Peck, 2022. "The Promise and Pitfalls of Conflict Prediction: Evidence from Colombia and Indonesia," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 764-779, October.
    10. Mounu Prem & Andrés F. Rivera & Dario A. Romero & Juan F. Vargas, 2018. "Killing Social Leaders for Territorial Control: The Unintended Consequences of Peace," Documentos de Trabajo 16385, Universidad del Rosario.
    11. Chuantao Cui & Leona Shao-Zhi Li, 2024. "More but not better: Career incentives of local leaders and entrepreneurial entry in China," Working Papers 202417, University of Macau, Faculty of Business Administration.
    12. Steven Riascos Carabalí & María del Pilar Castillo Valencia, 2020. "El ajuste de cuentas como un mecanismo para corregir contratos criminales," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, vol. 28(1), pages 67-88, June.
    13. Chen, Shuo & Qiao, Xue & Zhu, Zhitao, 2021. "Chasing or cheating? Theory and evidence on China's GDP manipulation," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 657-671.
    14. Gerardo Barbosa Castillo & Andrés Rolando Ciro Gómez, 2020. "Garantía de no repetición: una contribución a la justicia transicional," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1183, October.
    15. Aparicio, Juan P. & Jetter, Michael, 2020. "Captivating News in Colombia," IZA Discussion Papers 13834, Institute of Labor Economics (IZA).
    16. Aparicio, Juan P. & Jetter, Michael, 2022. "Captivating news: Media attention and FARC kidnappings," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 69-81.
    17. Morales, Juan S., 2021. "Legislating during war: Conflict and politics in Colombia," Journal of Public Economics, Elsevier, vol. 193(C).
    18. Gustav Agneman, 2022. "Conflict Victimization and Civilian Obedience: Evidence from Colombia," HiCN Working Papers 379, Households in Conflict Network.
    19. Travova, Ekaterina, 2023. "Under pressure? Performance evaluation of police officers as an incentive to cheat," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1143-1172.
    20. Edgar H. Sanchez-Cuevas, 2018. "Fighting Fire with Aid: Development Assistance as Counterinsurency Tool. Evidence for Colombia," Documentos CEDE 16378, Universidad de los Andes, Facultad de Economía, CEDE.
    21. Gelvez, Juan David, 2024. "Coca Politics: Electoral Accountability and Tough-on-Crime Policies in Colombia," OSF Preprints yn9rz, Center for Open Science.
    22. Mantilla, Cesar & Gelvez Ferreira, Juan David Gelvez & Nieto, Maria Paula, 2022. "Costly Norm Enforcement through Sanctions and Rewards: An Experiment with Colombian Future Police Officers," OSF Preprints aebxy, Center for Open Science.
    23. Laura Montenegro Helfer, 2017. "Forming State through Land Reform Policy: The Dynamics of Baldío Allocation in Peripheral Colombia," Documentos CEDE 15433, Universidad de los Andes, Facultad de Economía, CEDE.
    24. Leopoldo Fergusson & Carlos Molina & James A. Robinson & Juan F. Vargas, 2017. "The Long Shadow of the Past: Political Economy of Regional Inequality in Colombia," Documentos CEDE 15445, 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. Mounu Prem & Andrés Rivera & Darío Romero & Juan F. Vargas, 2018. "Killing social leaders for territorial control: the unintended consequences of peace," Documentos de Trabajo 17020, The Latin American and Caribbean Economic Association (LACEA).
    2. Delfgaauw, Josse & Souverijn, Michiel, 2016. "Biased supervision," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 107-125.
    3. Leopoldo Fergusson & Horacio Larreguy & Juan Felipe Riaño, 2022. "Political Competition and State Capacity: Evidence from a Land Allocation Program in Mexico," The Economic Journal, Royal Economic Society, vol. 132(648), pages 2815-2834.
    4. Stoop, Nik & Verpoorten, Marijke & van der Windt, Peter, 2019. "Artisanal or industrial conflict minerals? Evidence from Eastern Congo," World Development, Elsevier, vol. 122(C), pages 660-674.
    5. James Andreoni & Michael Callen & Karrar Hussain & Muhammad Yasir Khan & Charles Sprenger, 2023. "Using Preference Estimates to Customize Incentives: An Application to Polio Vaccination Drives in Pakistan," Journal of the European Economic Association, European Economic Association, vol. 21(4), pages 1428-1477.
    6. Bold, Tessa & Kimenyi, Mwangi & Mwabu, Germano & Ng’ang’a, Alice & Sandefur, Justin, 2018. "Experimental evidence on scaling up education reforms in Kenya," Journal of Public Economics, Elsevier, vol. 168(C), pages 1-20.
    7. Courty, Pascal & Marschke, Gerald, 2004. "A General Test of Gaming," CEPR Discussion Papers 4514, C.E.P.R. Discussion Papers.
    8. Leopoldo Fergusson & Carlos A. Molina & James A. Robinson, 2022. "The Weak State Trap," Economica, London School of Economics and Political Science, vol. 89(354), pages 293-331, April.
    9. Sandra Cavaco & Patricia Crifo & Aymeric Guidoux, 2020. "Corporate Social Responsibility and Governance: The Role of Executive Compensation," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(2), pages 240-274, April.
    10. Leander Heldring, 2014. "State Capacity and Violence: Evidence from the Rwandan genocide," CSAE Working Paper Series 2014-08, Centre for the Study of African Economies, University of Oxford.
    11. James Andreoni & Michael Callen & Muhammad Karrar Hussain & Muhammad Yasir Khan & Charles Sprenger, 2017. "Creating Investment Scheme with State Space Modeling ," CIRJE F-Series CIRJE-F-1039, CIRJE, Faculty of Economics, University of Tokyo.
    12. repec:oxf:wpaper:wps/2014-08 is not listed on IDEAS
    13. Asmus, Gerda & Franck, Raphaël, 2022. "State Capacity, National Economic Policies and Local Development: The Russian State in the Southern Urals," CEPR Discussion Papers 17103, C.E.P.R. Discussion Papers.
    14. Rohner, Dominic & Mueller, Hannes & Schönholzer, David, 2017. "The Peace Dividend of Distance: Violence as Interaction Across Space," CEPR Discussion Papers 11897, C.E.P.R. Discussion Papers.
    15. Chen, Shuo & Qiao, Xue & Zhu, Zhitao, 2021. "Chasing or cheating? Theory and evidence on China's GDP manipulation," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 657-671.
    16. Hannes Mueller & Dominic Rohner & David Schoenholzer, 2013. "Tectonic Boundaries and Strongholds: The Religious Geography of Violence in Northern Ireland," Cahiers de Recherches Economiques du Département d'économie 13.04, Université de Lausanne, Faculté des HEC, Département d’économie.
    17. Manuel Oechslin & Mauricio Rodriguez, 2021. "Fiscal weakness, the (under-) provision of public services, and institutional reform," Conflict Management and Peace Science, Peace Science Society (International), vol. 38(1), pages 20-44, January.
    18. Travova, Ekaterina, 2023. "Under pressure? Performance evaluation of police officers as an incentive to cheat," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1143-1172.
    19. Luis R. Martinez & Jonas Jessen & Guo Xu, 2023. "A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany," American Economic Journal: Applied Economics, American Economic Association, vol. 15(1), pages 68-106, January.
    20. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    21. Jesse Rothstein, 2015. "Teacher Quality Policy When Supply Matters," American Economic Review, American Economic Association, vol. 105(1), pages 100-130, January.

    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:nbr:nberwo:22617. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.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.