Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 17
From 1997 to 2005, an astonishing 5,200 million USD was invested to reduce cocaine production in Colombia, the worlds main cocaine producer. However, little is known about the effectiveness of policies targeting coca cultivation. This paper uses a surveybased experiment to evaluate the effects of the two main policies: eradication and alternative development programs. Our results support Beckers (1968) model of crime participation and in addition shed light on other non-monetary factors that affect the coca cultivation decision: religion, legitimacy, remoteness, and poverty are found to be important. We find that coca cultivation is inelastic to increases in perceived risk and relative profit so eradication and alternative development would have a rather small effect on coca cultivation. A simple simulation exercise predicts that investing additional hundred thousand dollars in eradication decreases coca cultivation in only 1.5%.