| Abstract: |
Internal conflicts entail large asset losses for certain segments in the
civilian population. Asset losses may compromise the future welfare of
households, thus leaving a legacy of structural poverty that is difficult to
overcome. The purpose of this article is to analyze how asset losses occur
during internal conflicts and the process of asset accumulation following the
initial shock. To do this, we concentrate on a particularly vulnerable group
of victims of war—the displaced population in Colombia. In achieving our
objective, we adopt quantitative and qualitative approaches by: (i) providing
a detailed description of losses stemming from forced displacement; (ii)
analyzing qualitative evidence so as to understand the asset recovery
processes for the displaced population; and (iii) estimating OLS, Instrumental
Variable and quartile regressions in order to identify the determinants of
asset losses stemming from forced displacement, and asset accumulation
following the initial shock. The results indicate that recuperating asset
losses or accumulating new assets is a rare event; only 25 percent of
households are able to recover their original asset base, while asset
ownership still seems insufficient for overcoming poverty. In addition,
displaced households do not catch up even as settlement at destination sites
consolidates. Therefore, unless a positive intervention is implemented,
displaced households become locked in a low income trajectory, and are
unlikely to leap forward to a high return asset level. |