nep-lam New Economics Papers
on Central and South America
Issue of 2024‒04‒01
two papers chosen by

  1. The Interaction of Economic and Political Inequality in Latin America By Fergusson, Leopoldo; Robinson, James; Torres, Santiago
  2. Beheading a Hydra: Kingpin Extradition, Homicides, Education Outcomes, and the End of Medellin’s Pax Mafiosa By Haugan, Gregory L.; Santos, Rafael

  1. By: Fergusson, Leopoldo; Robinson, James; Torres, Santiago
    Abstract: We investigate how economic inequality can persist in Latin America in the context of radical falls in political inequality in the last decades. Using data from Colombia, we focus on a critical facet of democratization - the entry of new politicians. We show that initial levels of inequality play a significant role in determining the impact of political entry on local institutions, policy, and development outcomes, which can impact future inequality. A vicious circle emerges whereby policies that reduce inequality are less likely to be adopted and implemented in places with relatively high inequality. We present evidence that this is caused both by the capture of new politicians and barriers to institution and state capacity building, and also by the fact that politicians committed to redistribution are less likely to win in relatively unequal places. Our results, therefore, help to reconcile the persistence of economic inequality with the new political context.
    Keywords: political entry;public policy;Development
    JEL: D72 D78 H5 H4 P0
    Date: 2024–02
  2. By: Haugan, Gregory L. (University of Chicago); Santos, Rafael (Universidad de los Andes)
    Abstract: In 2008, a powerful Colombian crime lord (Don Berna) was extradited to the United States. Homicides doubled in his stronghold of Medellin immediately following the extradition. We use variation in time generated by the pre- and post-extradition periods, and variation in space generated by areas of Medellin originally controlled by Don Berna to estimate the impact of the extradition on homicides. We then use the extradition as an instrument for homicides, and show that the wave of violence had downstream effects on education outcomes in the city. Homicide exposure led to a decrease in test scores, increased student dropout (driven by males and poorer students), and increased teacher turnover among teachers with the highest qualifications. Homicides disproportionately affect the test scores of high-performing and non-poor students.
    Keywords: Extradition; Homicides; Gang Violence; Education; Test scores
    JEL: D74 I25 J24 K42 O12 O15
    Date: 2024–03–11

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.