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Revisiting Economic Growth in Colombia: A Microeconomic Perspective

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  • Meléndez Arjona, Marcela
  • Harker, Arturo
Abstract
This paper revisits economic growth in Colombia using a growth diagnostics methodology to identify the most binding constraints for economic growth and the policies that, if implemented, can have the largest positive impact. The data shows economic reactivation in areas with falling violence. Results from analysis at the microeconomic level, however, give a particular spin to this conclusion by showing that investment decisions at the firm level are also explained by the restoration of some form of public order connected to the cessation of paramilitary violence. From a public policy perspective, perhaps the most relevant result is the confirmation that in Colombia, investment decisions are negatively affected by the cost of financing. Empirical results single out the provision of access to financing at fair prices as a policy priority for economic growth, independent of whether uncertainties from poor protection to property rights are resolved.

Suggested Citation

  • Meléndez Arjona, Marcela & Harker, Arturo, 2008. "Revisiting Economic Growth in Colombia: A Microeconomic Perspective," IDB Publications (Working Papers) 3706, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:3706
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    Cited by:

    1. Marcela Meléndez Arjona & Arturo Harker Roa, 2008. "Revisiting economic growth in Colombia. A microeconomic perspective," Working Papers Series. Documentos de Trabajo 9137, Fedesarrollo.
    2. Idrees Khawaja & Sajawal Khan, 2016. "Growth Diagnostics: Pakistan," PIDE-Working Papers 2016:143, Pakistan Institute of Development Economics.
    3. Marcela Eslava & Marcela Melendez, 2009. "Politics, Policies and the Dynamics of Aggregate Productivity in Colombia," Research Department Publications 4633, Inter-American Development Bank, Research Department.
    4. Wald, Nina & Bozzoli, Carlos, 2011. "Bullet Proof? Program Evaluation in Conflict Areas: Evidence from Rural Colombia," Proceedings of the German Development Economics Conference, Berlin 2011 80, Verein für Socialpolitik, Research Committee Development Economics.
    5. Marcela Meléndez Arjona & Guillermo Perry, 2009. "Industrial policies in Colombia," Working Papers Series. Documentos de Trabajo 9138, Fedesarrollo.
    6. Dragan TEVDOVSKI & Vladimir FILIPOVSKI & Igor IVANOVSKI, 2014. "A Diagnostics Approach To Economic Growth In Small Open Economies: The Case Of The Republic Of Macedonia," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 13, pages 47-68, June.
    7. Alexander Cotte, Poveda, 2011. "Economic development and growth in Colombia: An empirical analysis with super-efficiency DEA and panel data models," Socio-Economic Planning Sciences, Elsevier, vol. 45(4), pages 154-164, December.
    8. Ramón Espinasa, 2008. "Prospects for the Oil-importing Countries of the Caribbean," Research Department Publications 2007, Inter-American Development Bank, Research Department.
    9. Murillo, Maria Victoria & Scartascini, Carlos & Tommasi, Mariano, 2008. "The Political Economy of Productivity: Actors, Arenas, and Policies. A Framework of Analysis," IDB Publications (Working Papers) 1642, Inter-American Development Bank.
    10. Perry, Guillermo & Meléndez Arjona, Marcela, 2010. "Industrial Policies in Colombia," IDB Publications (Working Papers) 1808, Inter-American Development Bank.
    11. Mauricio SANTAMARIA SALAMANCA & Gabriel PIRAQUIVE GALEANO & Gustavo HERNANDEZ DIAZ & Norberto ROJAS DELGADILLO, 2013. "Crecimiento económico y desempleo: Retos a largo plazo," Archivos de Economía 11202, Departamento Nacional de Planeación.

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    More about this item

    Keywords

    growth; investment; public policy; Colombia;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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