Oiling up the Field: Forced Internal Displacement and the Expansion of Palm Oil in Colombia
Publisher: World Development
Author(s): Jaime Millan-Quijano and Sebastian Pulgarin
Date: 2023
Topics: Conflict Causes, Governance, Livelihoods, Renewable Resources
Countries: Colombia
Widespread analysis of the link between natural resources and conflicts has shown how positive income shocks in agriculture usually reduce violence (opportunity cost effect), while positive shocks in extractive commodities intensify it (rapacity/lootability effect). However, recent works have found cases where positive income shocks in agriculture lead to more violence. This article examine the expansion of palm oil in Colombia to document another case where higher expected profits in agriculture led to more violence. Furthermore, the authors explore the institutional framework that explains the direction of this effect. Using a difference-in-difference strategy, we find that a 1 log point increase in palm oil prices raises the forced internal displacement rate in palm municipalities by 0.42 standard deviations. Evidence is shown supporting the hypothesis that the need for new lands explained the violence linked to the palm expansion within a framework in which weak property rights and illegal institutions were predominant. Likewise, the authors shed light on how the institutional framework shapes the relationship between income shocks and conflict.