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Title:Cocaine cities: Exploring the relationship between urban processes and the drug trade in South America PDF Logo
Authors:Navarro, Ignacio A.
Issue Date:2011
Series/Report no.:Working paper // World Institute for Development Economics Research 2011,09
Abstract:The relationship between the cocaine trade and urban land markets in South America has been overlooked by the mainstream economics and urban studies literature. This paper examines two avenues through which the cocaine trade can have a large impact on urban development in producer countries: (i) through an employment multiplier effect similar to that of other legal exports, and (ii) through money laundering using urban real estate. We test our hypotheses using the Bolivian case and find that urban growth patterns are closely related to fluctuations in cocaine production. Further, even though our estimates suggest that the cocaine trade affects urban growth through the two avenues presented in the paper, we find that formal urban employment generated by the cocaine trade has a modest effect on urban growth and most of the effect seems to be explained by money laundering using real estate and other paths.
Subjects:cocaine trade
urban development
money laundering
Bolivia
JEL:R11
R14
R31
ISBN:978-92-9230-372-3
Document Type:Working Paper
Appears in Collections:WIDER Working Papers, United Nations University (UNU)

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