How Not to Build a State: Evidence from Colombia’s False Positives D. Acemoglu MIT L. Fergusson U. Andes J. Robinson Harvard D. Romero IADB J. Vargas U. Rosario 36th Meeting of the Brazilian Econometric Society December 10, 2014, Natal, Brazil Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 1 / 68
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How Not to Build a State:Evidence from Colombia’s False Positives
D. AcemogluMIT
L. FergussonU. Andes
J. RobinsonHarvard
D. RomeroIADB
J. VargasU. Rosario
36th Meeting of the Brazilian Econometric SocietyDecember 10, 2014, Natal, Brazil
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 1 / 68
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 2 / 68
Motivation
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 3 / 68
Motivation
State capacityMany countries lack state capacity, despite large payoffs
Weak states: argued to be the root of civil wars(Fearon and Laitin, 2003).
Difference between economically successful and unsuccessful countries(Evans, 1995, Herbst, 2000, Besley and Persson, 2011, Acemoglu andRobinson, 2012... many others).
Variation in state capacity related to many different factors:
historical path dependence (Evans),ecology population density (Herbst),political economy (Besley and Persson, Acemoglu and Robinson).
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 4 / 68
Motivation
But how does a state with low capacity build it?Paying for performance?
Capacity is multi-dimensional:
fiscal, bureaucratic, legal......and key: monopoly of violence.How should a state which lacks monopoly of violence acquire it?
Imagine a political majority in favor of building capacity.
Alvaro Uribe’s presidential election in May 2002.
To attain monopoly of violence could expand on:
extensive margin (hire more soldiers), orintensive margin (make existing soldiers work harder).
How to manage the intensive margin?
One way is high-powered incentives.
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 5 / 68
Motivation
This researchPaying for performance in Colombia and its consequences
We investigate high-powered incentives in the Colombian army.
We show these incentives:1 Are systematically related to murder of civilians portrayed as guerrillas
killed, “false positives”, especially:
1 In units of military officers with pressing career concerns.2 Where the judiciary is weak.
2 Created an incentive to corrupt the judiciary, hence eroding otherdimensions of institutions.
High-powered incentives can have very perverse effects.
Innocents killed.Stronger military, but not consensually strong.Other institutions hurt.
→ Hard to build state in one dimension.→ Complementary efforts in several dimensions are needed.
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 6 / 68
Context
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 7 / 68
FP had long existed in Colombia, but more common in 2000s.
Figure
Increase coincided with incentives to fight insurgents:
Law 782 of 2002: fund for intelligence operations and rewards todemobilized rebels.2003: Democratic Security document announces system of rewards forinformation (regulated by decrees 128 of 2003 and 2767 of 2004).Other directives and decrees:
Directive 029 of 2005 (and 015 and 016 de 2007): incentive scheme forinformants leading to captures or killings. (‘Secret’ documentsnot so secret).Decree 1400 of 2006 (Boina or Beret).
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 9 / 68
Context
Introducing incentivesFeatures of incentives: formal and informal
Formally set a reward schedule for killings and capturing insurgents,seizing weapons and sharing information:
1 Military personnel was not explicitly excluded(also not explicitly included, except in Boina: up to one year salary),
2 No authorization ex ante by a superior officer required for operation,3 Posterior intelligence could be used to justify the killings.
Informal and unregulated incentives (see, e.g. UN SpecialRapporteur):
Days off when holidays approached, send to platoon on Sinai(foot soldiers).Medals, and promotions(commanders).
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 10 / 68
Context
Removing incentives
FP fall substantially in late 2008: media scandal after killing ofseveral men from Soacha, near Bogota.
Government claimed victims were guerrillas killed in combat.Judicial investigations revealed this was not the case, and FP werewidespread.
Government issued new directives changing incentive structure:1 Explicitly exclude rewards to military personnel.2 Prioritize rewards to successful operations that did not involve killings
(demobilizations, captures).3 Require first investigation of combat-related deaths by judiciary.4 Require prior intelligence for operations.
Also ousted high-ranked officials involved in FPs and created specialunit for FPs at Office of Attorney General.
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Context
False positives and career concernsThe case of colonels
Colombian army nearly tripled during 2000s→ some brigades commanded by colonels, not generals.
Career concerns attached to new incentives more likely to affectcolonels, who still can go up the military ladder.
Captain Rozo Valbuena testimony against other officer:His only objective was to gather enough “statistics” to be able to bepromoted to General.
27 soldiers expelled by platoon commander (a colonel) for not killingtwo people (dressed as civilians). Soldier description:
“When my colonel came in he started insulting us and scoldingus, and told us that we were good for nothing, that we did notunderstand that a guerrilla member alive was useless for him,and that what mattered were killings because he was going to bepromoted to general and that is how his performance wasmeasured. He told us he was going to have us all expelled.”
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 12 / 68
Context
False positives and institutional weaknessThe case of weak judicial institutions
The difficulty in controlling abuses reflects, and promotes,institutional weakness.
Of the 1,056 cases of killings by armed forces that were assigned to theFiscalıa (Attorney General) through April 2009, only 16 resulted inconvictions (Alston, 2010, p. 13).
Example: testimony from witnesses in case against Colonel Mejıa
“Mejıa had no trouble doing it because the local director of theAttorney General Office helped him with the setup”“When a person disappeared, his family members went todenounce it to the Police or the Ombudsman or any otherinstitution in charge and, after this, the next victims where thosedenouncing.”Yesterday news’ example
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 13 / 68
A simple model
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 15 / 68
A simple model
Incentive scheme and agent utility
A principal sets a linear incentive scheme.
Focus on implications for agent, who exerts:
good effort: aT → qT (true positives), orbad effort: aF → qF (false positives).
Output linear in effort and noise εJ , independent and N(0, σ2J):
qJ = aJ + εJ , for J ∈ {T ,F},
CARA preferences over wage w net of effort costs Ψ(aT , aF ),
E[−e−η(w−Ψ(aT ,aF ))
].
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 16 / 68
A simple model
Technological complementarity or substitutability
Effort cost:
Ψ(aT , aF ) =1
2(cTa2
T + cFa2F ) + δaTaF for |δ| ≤
√cT cA
Effort substitution, δ = Ψ′′aT aF > 0:
Extreme with specialization:
δ =√
cT cA → Ψ(aT , aF ) =1
2(√
cTaT +√
cFaF )2.
Technological complements, δ = Ψ′′aT aF < 0
Extreme with constant ratio:
δ = −√
cT cA → Ψ(aT , aF ) =1
2(√
cTaT −√
cFaF )2.
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 17 / 68
A simple model
Reported killings and wageIntroducing misreporting and differential incentives
Misreporting: α false positives can be portrayed by true positives.
α: poor quality of local institutions.Reported true positives qT :
qT = qT + αqF .
Incentives: colonels’ payoff depends more on output.
π: relative importance of output in the agent’s wage.Flat salary t plus linear incentive s based on reported killings:
w = (1− π)t + πsqT
= (1− π)t + πs(qT + αqF ).
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and output volatility are not too large (bound on ησ2F ):
∂u(a∗T , a∗F )
∂α> 0
∂2u(a∗T , a∗F )
∂α∂π> 0.
Agent’s are especially interested in reducing the quality of institutionswhen facing stronger incentives (high π).
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A simple model
SummaryTestable predictions
1 Increase in incentives:1 Increase average qT and qF ,2 Especially with colonels (high π),3 Especially with weak local institutions (high α),
except if effort substitution → high α attenuate effect on qT .
2 Impact on institutions:1 Agents interested in decreasing quality of local institutions.2 Especially where π is larger (colonels).
3 Remarks:
Many other things changed when incentives were introduced.Impact on true positives indirectly test technological relation.
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Data and Empirical Strategy
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 24 / 68
Data and Empirical Strategy Data
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 25 / 68
Data and Empirical Strategy Data
Measuring FP
Source: Colombian Human Rights NGO CINEP.
Compiles list of events of arbitrary executions of alleged rebels.
Information on:
date and place of recruitment and execution; victim presented asguerrilla or paramilitary; perpetrators from Army, Police, or Navy;battalion or brigade responsible.
Alternative datasets are likely to be less accurate:
Official counts based on investigations: underreporting or geographicbias related to state capacity.Counts from victims’ associations: criticized as overstating FP.
Our data: 925 cases of FP involving 1,513 victims from 1988 to 2011.
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Data and Empirical Strategy Data
Identifying army ranks
Reconstructed historical organizational structure of the army:
Current structure (number, position, jurisdiction and commanders ofDivisions, Battalions and Brigades) available from the army website.For previous:
Expired versions of the website (available since 2000 from the “WayBack Machine”).Other online sources (notably news stories in media archives, especiallyEl Tiempo, Colombia’s main newspaper)
Match with CINEP data on brigade involved in FP cases to identifyrank of commanders of alleged criminals.
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Data and Empirical Strategy Data
Measuring judicial inefficiency
Inspector General (Procuradurıa): disciplinary oversight of publicservants.
Event-based dataset with all processes, by municipality, 1995-2008.
1 Population2 Security conditions in terms of conflict and crime (4 variables)3 Educational outcomes (4 variables)4 Municipal income and rents (6 variables)5 Presence of natural resources (5 variables)6 State presence and institutional capacity (22 variables)
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Data and Empirical Strategy Empirical Strategy
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 31 / 68
Data and Empirical Strategy Empirical Strategy
False positives, judicial inefficiency, and army ranks
F. Positivem,t = α + δm + δt + β0Colonelm,t
+ β1 (Colonelm,t × Posty )
+ β2
(Judicial Inefficiencym,0 × Posty
)+∑x∈Xm
Φxx × Posty + εm,t , t∈{2000−2008}.
F. positivem,t = {Dummy, Count, Killings}.
Posty =
1, if t ≥ 2003,
1, if t ≥ 2004,
1, if t ≥ 2005,
1, if t ≥ 2005 Excl. 2003, 2004.
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 32 / 68
Data and Empirical Strategy Empirical Strategy
False positives, judicial inefficiency, and army ranks
F. Positivem,t = α + δm + δt + β0Colonelm,t
+ β1 (Colonelm,t × Posty )
+ β2
(Judicial Inefficiencym,0 × Posty
)+∑x∈Xm
Φxx × Posty + εm,t , t∈{2000−2008}.
F. positivem,t = {Dummy, Count, Killings}.
Posty =
1, if t ≥ 2003,
1, if t ≥ 2004,
1, if t ≥ 2005,
1, if t ≥ 2005 Excl. 2003, 2004.
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 33 / 68
Data and Empirical Strategy Empirical Strategy
False positives, judicial inefficiency, and army ranks
F. Positivem,t = α + δm + δt + β0Colonelm,t
+ β1 (Colonelm,t × Posty )
+ β2
(Judicial Inefficiencym,0 × Posty
)+∑x∈Xm
Φxx × Posty + εm,t , t∈{2000−2008}.
F. positivem,t = {Dummy, Count, Killings}.
Posty =
1, if t ≥ 2003,
1, if t ≥ 2004,
1, if t ≥ 2005,
1, if t ≥ 2005 Excl. 2003, 2004.
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 34 / 68
Data and Empirical Strategy Descriptive Statistics
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 35 / 68
Data and Empirical Strategy Descriptive Statistics
Table 1 : Descriptive Statistics for Variables, 2000-2008
The impact on true positives and institutions Impact on institutions
Size of the effectsTaking 2003 as the post year
A one-standard deviation increase in Judicial Inefficiency implies anincrease, relative to the pre-period,...
about 1-2 percentage points higher probability of a FP occurring(FP dummy: average increase was from 0.7% to 7%)...about 0.05-0.07 more false guerrilas killed(FP killed: average increase was from 0.02 to 0.13).
A colonel rather than a general implies an increase, relative to thepre-period,...
about 3 to 5 percentage points higher FP dummy...about 0.16 more FP killed...about 0.02 higher judicial inefficiency(Judicial inefficiency constant on average at 0.06).
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Conclusions
Contents
1 Motivation
2 Context
3 A simple model
4 Data and Empirical StrategyDataEmpirical StrategyDescriptive Statistics
5 Main results: Incentives and false positives
6 The impact on true positives and institutionsTrue positivesImpact on institutions
7 Conclusions
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 51 / 68
Conclusions
Conclusion: How Not to Build a StateHow does a State lacking the monopoly of violence acquire it?
High-powered incentives to army members in the fight against theinsurgency in Colombia:
Are systematically related to ‘false positives’.Specially for military officers with career concerns & where statejudicial institutions are weak.Created an incentive to corrupt other institutions.
What do we learn from this?
→ Building state capacity in one dimension is difficult, evencounterproductive, when state is generally weak.
→ High-powered incentives in this context can have very perverse effects.→ Complementary efforts in several dimensions at the same time are
required.
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Conclusions
Thank you!
Brazilian Econometric Society (12-10-2014) How Not to Build a State Colombia’s ‘False Positives’ 53 / 68
COPIA No [2- DE I j, COPIP,s MINISTERIO DE DEFENSA NACIONAL BOGOTA, D.C. 1 7 NOV . .2005
DIRECTIVA MINISTERI.AL PERMANENTE
ASUNTO : Politica ministerial que desarrolla critErios para el pago de recompensas por la captura 0 abatimiento en combale de cabecillas de las organizaciones armadas al margen de la ley, material de guerra, intendencia 0 comunicaciones e informacion sobre actividades relacionadas con el narcotrafico y pago de informacion que sirva de fundamento para la
de labores de. inteligencia y el posterior planeamiento de operaciones.
AL
1. OBJETO Y ALCANCE.-
a. Finalidad
Oefinir una politica ministerial que desarrolle criterios claros y definidos para el pago de recompensas por la captura 0 abatimiento en combate de cabecillas de las organizaciolles armadas al margen de la ley, material de guerra, in!endencia 0 comunicaciones e informacion sobre actividades relacionadas con el narcotrafico y pago informacion que sirva de fundamento para la continuacion de labores de inteligenCla y el posterior planeamiento de operaciones.
b. Objetivos Especificos
i) Definir pago por informacion Y'·pago por recompensas.
ii) Fijar critErios de valoraci6n para cancelar recompensas por los principales cabecillas de las OA.ML y los cabecillas de narcotrafico, de