TY - JOUR AU - Angrist,Joshua D. AU - Kugler,Adriana TI - Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia JF - National Bureau of Economic Research Working Paper Series VL - No. 11219 PY - 2005 Y2 - March 2005 UR - http://www.nber.org/papers/w11219 L1 - http://www.nber.org/papers/w11219.pdf N1 - Author contact info: Joshua Angrist Department of Economics MIT, E52-353 50 Memorial Drive Cambridge, MA 02142-1347 Tel: 617/253-8909 Fax: 617/253-1330 E-Mail: angrist@mit.edu Adriana D. Kugler Georgetown University Georgetown Public Policy Institute 37th and O Streets NW, Suite 311 Washington, DC 20057 Tel: 202/687-5716 Fax: 202/687-5544 E-Mail: ak659@georgetown.edu AB - Natural and agricultural resources for which there is a substantial black market, such as coca, opium, and diamonds, appear especially likely to be exploited by the parties to a civil conflict. On the other hand, these resources may also provide one of the few reliable sources of income in the countryside. In this paper, we study the economic and social consequences of a major shift in the production of coca paste from Peru and Bolivia to Colombia, where most coca leaf is now harvested. This shift, which arose in response to the disruption of the "air bridge" that previously ferried coca paste into Colombia, provided an exogenous boost in the demand for Colombian coca leaf. Our analysis shows this shift generated economic gains in rural areas, primarily in the form of increased self-employment earnings and increased labor supply by teenage boys. There is little evidence of widespread economic spillovers, however. The results also suggest that the rural areas which saw accelerated coca production subsequently became much more violent. Taken together, these findings support the view that the Colombian civil conflict is fueled by the financial opportunities that coca provides. This is in line with a recent literature which attributes the extension of civil conflicts to economic rewards and an environment that favors insurgency more than to the persistence of economic or political grievances. ER -