| dc.description.abstract | This dissertation explores three different but related economic issues in the country of Colombia. The first chapter determines the impacts of the prolonged civil conflict suffered in Colombia on its unemployment rate compared to other similar Latin American economies. The second chapter explores the effect of the presence of illegal leftist and rightist armed groups on municipal investments into education, health, infrastructure and environment. The third chapter determines the effect of the municipal location relative to a border, on the municipal investment decisions into wastewater management. Chapter I., co-authored with Alexander Alegría Castellanos PhD., assesses the impact of the Colombian conflict on the unemployment rate for the period 1995-2014. Calderon-Mejia and Ibañez (2016) assess the effects of forced displacement on the labor market, specifically on wages. Our study relies on their findings, and additionally explores the effect of the conflict on the unemployment rate in Colombia. To estimate this effect, we use a difference-in-differences regression analysis to establish the average treatment effect relative to similar countries. Similarly, we use the Synthetic control method to estimate the effect of the conflict on the unemployment rate. Using both methods, we find a higher unemployment rate in Colombia relative to a counterfactual formed by Latin American countries, after an increase in the intensity on the conflict in 1995 due to changes in the drug war strategy. We demonstrate the significance of our results using a placebo tests. Overall, our results identify the incidence of the violent conflict on the total unemployment rate. Chapter II. This study assesses the effects of leftist guerrilla groups and rightist paramilitary groups on investments made by the municipal governments in the country of Colombia between 2000 and 2010. Specifically, how the presence of illegal armed groups affects levels of municipal investments into education, health, infrastructure, environmental protection, and other categories. Limits on political participation and institutional weaknesses were key elements propagating violence that disrupted Colombia for years. Searching for solutions to these structural problems, Colombia transferred many decision-making responsibilities from the central government to regional and local governments in [years]. Paradoxically this decentralization opened an opportunity for illegal armed groups to play meaningful roles in local political and economic life, eventually taking control over local resources in several municipalities. To assess the importance of these groups, empirical analysis exploits annual budgetary data for municipalities, information on conflict and violence, and community-level socioeconomic data (e.g., income, population). In this analysis, the dependent variables reflect municipal investment measured in three ways: total investment, levels of investment categories, and categorical proportions of total investment. The primary regressors are the presence of rightist paramilitaries and the presence of leftist guerrillas. Results suggest a differentiated impact by leftist and rightist groups. In proportional terms, municipalities affected by leftist guerrillas allocated less of their investments into environment and infrastructure, yet more into health. In contrast, municipalities affected by rightist paramilitaries allocated less of their investments in health, yet more into education. Chapter III. examines the effect of location on municipal investment into wastewater management. Specifically, it explores whether location, relative to regional and international borders, plays a role in these investment decisions. Intuitively, transboundary aspects of pollution undermine a jurisdictional government’s desire to curtail the amount of pollution generated from a source. As the distance between the source and a border falls, the transboundary aspects grow since a greater proportion of the detrimental effects of the pollution are born by neighboring downstream jurisdictions. Empirical studies consider the problem of transboundary pollution by examining various relevant outcomes. Some studies examine pollution levels on two sides of an intra-national border. Other studies assess environmental quality at intra-national or international borders. Additional studies examine the stringency of regulations imposed on and enforcement actions taken against facilities located at or near borders. Our study contributes to this literature in two ways by (1) developing a rich conceptual framework to explain governmental use of policy tools to induce better environmental management by polluters, and (2) exploring the problem of transboundary pollution in the context of a developing economy. Using data for municipalities in the country of Colombia between 2000 and 2013, we find that municipalities located further from an intra-national border invest more into wastewater management than municipalities located closer to an intra-national border, consistent with the hypothesis that regional governments employ policy tools more strongly against the former set of municipalities. However, distance to international borders does not affect municipal wastewater investment. | |
