Illicit Behavior and the Foundations of State-building: Evidence from Colombia

Abstract: Successful state-building after a long period of de facto dominance of non-state actors relies on the extent to which local populations trust the state institutions and reduce collaboration with illegal armed groups. In the last decade, the Colombian government and the international community have invested hundreds of million of dollars in an effort to consolidate state capacity in areas formerly controlled by illegal armed groups after a five-decade long internal conflict. We evaluate the impact of such efforts on the engagement of local communities in activities such as collaboration with non-state actors and growing illegal crops. Yet these behaviors are difficult to measure directly. To that end, we administer two list experiments to a sample of over 20,000 households in the municipalities that have received consolidation investments, as well as in a sample of matched-control municipalities. Our findings indicate that the overall level of engagement in illegal activities has decreased during the intervention period, but not differentially so in treated municipalities. However, this result is more nuanced when heterogeneous effects are explored.