On the Effects of Enforcement on Illegal Markets: Evidence from a Quasi-Experiment in Colombia

33 Pages Posted: 20 Apr 2016  

Daniel Mejia

Universidad de los Andes, Colombia - Department of Economics

Pascual Restrepo

Boston University - Department of Economics

Sandra V. Rozo

University of Southern California - Marshall School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: September 2, 2015

Abstract

This paper studies the effects of enforcement on illegal behavior in the context of a large aerial spraying program designed to curb coca cultivation in Colombia. In 2006, the Colombian government pledged not to spray a 10 km band around the frontier with Ecuador due to diplomatic frictions arising from the possibly negative collateral effects of this policy on the Ecuadorian side of the border. This variation is used to estimate the effect of spraying on coca cultivation by regression discontinuity around the 10 km threshold and by conditional differences in differences. The results suggest that spraying one additional hectare reduces coca cultivation by 0.022 to 0.03 hectares; these effects are too small to make aerial spraying a cost-effective policy for reducing cocaine production in Colombia.

Keywords: Armed Conflict

Suggested Citation

Mejia, Daniel and Restrepo, Pascual and Rozo, Sandra V., On the Effects of Enforcement on Illegal Markets: Evidence from a Quasi-Experiment in Colombia (September 2, 2015). World Bank Policy Research Working Paper No. 7409. Available at SSRN: https://ssrn.com/abstract=2655254

Daniel Mejia (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1 No. 18 A - 10
Bogotá, AA4976
Colombia
57(1)3394949 ext 3737 (Phone)
57(1)3324492 (Fax)

HOME PAGE: http://economia.uniandes.edu.co/share/scripts/home/home.php

Pascual Restrepo

Boston University - Department of Economics ( email )

Sandra V. Rozo

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

HOME PAGE: http://www.sandravrozo.com

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