Internal displacement and economic outcomes: evidence from Colombia and the rest of the world

This thesis determines the relationships between a range of economic variables and the increasing levels of internal displacement occurring over the past decade. This thesis includes two studies, an examination of Colombia as the country with the highest levels of internal displacement and second, a global overview. The study on Colombia examines the relationship between coca cultivation and eradication, violence and other economic variables that may add to Colombia’s internal displacement problem. Derived from a panel data set using OLS, fixed effects models and lagged variables, the results show definite positive significant relationships between coca eradication, a lagged coca cultivation variable and homicide levels across all models, whilst suggesting that other economic indicators, such as labour participation rate, may also contribute to the problem. Second, a global empirical study is conducted, and although the results are not as robust as in the previous analysis, the analysis reveals that increased levels of internally displaced persons (IDP) are correlated with decreased primary and secondary school attainment levels, as well as decreased economic output, while Official Developmental Assistance (ODA) appears to have a negative relationship with IDP populations as opposed to a positive link with Foreign Direct Investment (FDI). The results inform future economic and narcotic policies within Colombia to ensure that civilians are not economically harmed or marginalised as a result and that the economic situation facing IDPs is taken into account.<br>