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Drugs and Violence in Colombia: a VECM Analysis

Tomás González and Ronald Smith

No 906, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: It has been widely argued that the production of illegal drugs, particularly cocaine, has financed guerrilla activity in Colombia. This paper uses quarterly time-series data for Colombia 1994-2005 to examine the interaction between legal agricultural production, illegal agricultural production of drugs and the number of guerrilla attacks. The time series analysis suggests that drug production acts as a weakly exogenous stochastic trend which has a negative effect on legal agricultural production and a positive effect on guerrilla attacks; with a long-run elasticity of attacks to drug production very close to unity.

Date: 2009-06
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https://eprints.bbk.ac.uk/id/eprint/7560 First version, 2009 (application/pdf)

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