In the Line of Fire: Political Violence and Decentralization in Colombia

Abstract

Policies aimed at increasing the resources and autonomy of subnational governments are often proposed as a conflict resolution strategy. This paper explores a particular threat to the effectiveness of such reforms in war-torn countries, namely the capture of local governments by non-state armed actors. These groups are reliant on rents and may increase their violence in an attempt to capture new public resources. This is explored using subnational-level data from Colombia during the 1990s, when local fiscal capacity was greatly expanded. I exploit a key reform in the system fiscal transfers to identify the effect of automatic transfers on selective political violence. The evidence shows that the increase in the fiscal resources is associated with higher murder rates of local authorities and politicians. Moreover, this effect is conditional on local state capacity. These results are robust and consistent with the rent-seeking strategy of paramilitaries and guerrillas during the period.

Keywords: Civil war, armed insurgencies, fiscal reform, armed clientelism