What determines the extent of electoral fraud? This paper constructs a model of the tradeoff between fraud and policy concessions (public good provision) which also incorporates the strength of the state. In addition, we parameterize the extent to which economic elites (to whom fraud is costly) and political elites (to whom fraud is advantageous) “overlap.” The model predicts that fraud will be lower and public good provision higher when land inequality is higher, the overlap between elites lower, and the strength of the state higher. We test these predictions using a unique, municipal-level dataset from Colombia's 1922 Presidential elections. We find empirical support for all the predictions of the model.

Tax evasion lies at the core of the relationship between citizens and the state: it reflects the level of trust in the state and compliance with society's implicit `social contract'. However, empirically analyzing it is challenging, with few direct and reliable measures. This has hampered the advancement of the theoretical and empirical literature, which is especially underdeveloped in the case of indirect tax evasion. We conduct list experiments on a large sample of households to estimate the incidence of value added tax (VAT) evasion, as well as the extent of social desirability bias in respondent answers. Around 20% of respondents engage in evasion and, surprisingly, they are not ashamed to recognize this openly. Evasion is more prevalent in places with more informality and less physical presence of the state, as well as among poorer, less educated individuals, and those who disregard the rule of law.

Exchanging one's vote for particularistic benefits - practices usually grouped under `clientelism' - is often thought to weaken programmatic links between citizens and politicians and disincentivize public good provision, as well as undermine voter autonomy and the ideal role of elections. However, empirically analyzing this key phenomenon for the working of democracies entails formidable challenges. We conduct list experiments on a large sample of households to estimate the incidence of clientelistic vote buying, as well as the extent to which respondents refrain from openly recognizing this behavior. Nearly one out of every five respondents engage in clientelism and, surprisingly, they do not feel ashamed to admit it. Using the literature to guide our analysis, we examine the robust correlates of clientelism, finding that vote buying increases with poverty, reciprocity, disregard for the rule of law and, challenging several theories, interest in politics.Keywords: Clientelism, vote buying, social desirability bias, list experiments.

Enduring violent conflict is the flip side of the coin of a weak state. In this article, I propose some political economy underpinnings for the persistence of conflict (and the weak state). Focusing on the case of Colombia, I discuss three broad sets of mechanisms that are also relevant elsewhere. First, a public goods trap" implies that a low supply of public goods (including security and order) produces a low demand for public goods, and vice versa. This trap is grounded on, and reproduces, political and economic inequality. Second, conflict and a weak state create economic and political rents, producing vested interests in the status quo. I argue that political rents are a particularly strong obstacle, partly because reformers face a sort of curse of dimensionality: many things have to work well for state capacity and stable peace to consolidate. Politically powerful groups take advantage of any weak spot to defend their rents, producing countervailing negative effects following state building efforts. Finally, the very clientelistic pattern of political exchange in many societies consolidates a weak state, and weak states are fertile ground for clientelism to flourish. This vicious circle of clientelism and state weakness is another reason for persistence. I conclude discussing some lessons for reformers, though the very nature of the argument implies that there are no easy recipes for success.

We document the existence of a Crime Kuznets Curve in US states since the 1970s. As in come level shave risen, crime has followed an inverted U-shaped pattern, first increasing and then dropping. The Crime Kuznets Curve is not explained by income inequality. In fact, we show that during the sample period inequality has risen monotonically with income, ruling out the traditional Kuznets Curve. Our finding is robust to adding a large set of controls that are used in the literature to explain the incidence of crime, as well as to controlling for state and year fixed effects. The Curve is also revealed in nonparametric specifications. The Crime Kuznets Curve exists for property crime and for some categories of violent crime.

Among the fundamental causes of long‐run economic performance, differences in ‘institutions’ have received considerable attention in recent years. At the same time, a large body of theoretical and empirical work shows that financial development can have a big effect on economic performance. This raises the more fundamental question as to why some countries have developed financial markets while others do not. This paper reviews the theoretical and empirical research on this issue and shows that one of the channels whereby better institutions may have an effect on economic development is through the consolidation of larger and better financial markets. An issue that is left aside in this paper relates to what regulations and policies lead to better functioning capital markets. At some level, one can think of regulations and policies as particular types of institutions. Nonetheless, institutional problems are deeper causes leading to poor economic performance; bad policies might simply be part of the channels through which they influence performance. Thus, addressing the question of what determines the emergence of ‘good’ institutions – i.e. institutions that promote financial development – seems particularly important. Recent research providing some answers to this question is also reviewed.

During the 1990s, the performance of several emerging economies was linked to their access to foreign capital. Colombia was no exception, experiencing a boom and bust cycle associated with an initial period of real exchange rate appreciation followed by a sharp depreciation. Although several studies have discussed the recent underperformance of the Colombian economy, few attempts have been made at analyzing firm-level data. We rely on information for a large sample of firms during 1995–2001 and examine the determinants of foreign indebtedness and the effects on firm performance of holding dollar debt amid real depreciations (i.e. the so-called ‘balance sheet effect’). In our data set, matching does seem to take place to the extent that firms in more open sectors and exporting firms have higher shares of dollar debt. Our estimations also reveal a negative balance sheet effect on firms’ profitability, while the effect on investment is generally not significant.

Describimos algunas características del ambiente político en Colombia, a partir de una base de datos panel única con cerca de 10,000 hogares. Comparando respuestas en 2013 y 2016, documentamos una persistente falta de interés en política y un clientelismo prevaleciente, con vínculos personales dominando a las afinidades partidistas. El involucramiento en la compra clientelista de votos, en cambio, es bastante variable en el tiempo, y los hogares entran y salen de estas relaciones. Contradiciendo las más simples y optimistas teorías de la modernización, no encontramos que incrementos en la riqueza del hogar estén correlacionados con el abandono del clientelismo. En cambio, los cambios en la debilidad del estado (medida con la evasión tributaria) sí se correlacionan fuertemente con cambio en el clientelismo. Fortalecer el estado parece, por lo tanto, una tarea prioritaria. Entendiendo los esfuerzos de construcción de paz como un paso en esta dirección nos conduce a examinar las actitudes hacia el reciente proceso de paz entre el gobierno y las Farc, el grupo guerrillero más grande en Colombia. Con unas preguntas especiales incluidas en el 2016, evaluamos las opiniones de los hogares sobre estos temas. Los datos muestran una curiosa combinación de indiferencia y polarización hacia el proceso de paz. Una porción grande de la población siente que el proceso de paz implica pocos cambios para su vida, y entre aquellos que esperan cambios aproximadamente la mitad tienen expectativas positivas y el restante negativas. Los que viven en áreas con mayor presencia de grupos armados tienden a ser menos indiferentes, pero no son simplemente más pesimistas o más optimistas. La mayoría de los encuestados reportan poca resistencia a tener ex-combatientes como vecinos o empleados, pero rechazan relativamente más la participación política y financiar los beneficios para los rebeldes (dos aspectos cruciales del acuerdo de paz).

We describe some features of the political environment in Colombia, drawing from a unique panel dataset of about 10,000 households. Contrasting responses in 2013 and 2016, we document a persistent lack of interest in politics and prevailing clientelism, with personalistic links dominating partisan affinity. Engagement in clientelistic vote buying, instead, is quite variable in time, with households getting into and out of these exchanges. Rejecting the simplest and more optimistic theories of modernization, we do not find that increases in household wealth correlate with the abandonment of clientelism. Instead, changes in the weakness of the state (as proxied with tax evasion) correlate strongly with changes in clientelism. Strengthening the state therefore seems a priority. Viewing peace-building efforts as one key step in this direction naturally leads to the examination of the attitudes towards the recent peace process between the government and the Farc, Colombia's largest guerrilla group. With a special set of questions included in 2016, we also study households' perspectives on this topic. The data reveals a rare combination of indifference and polarization towards the peace process. A large share of people feel the peace process implies no substantial changes for their lives, and those that do are approximately equally divided between those expecting positive and negative changes. Those who live in areas in which non-state armed groups were present are relatively less indifferent, yet they are not simply more pessimistic or optimistic. Most respondents report no discomfort with having former rebels as neighbors or employees, but they do reject political participation and financing benefits for rebels (two key aspects of the peace treaty) comparatively more.

Este artículo presenta algunas características de la forma como los colombianos se relacionan con la política, a partir de información recopilada en la ELCA por primera vez en el año 2013.