Rafael Ch et al. TABLE 2. Cumulative Violence and Property Tax Performance Dependent variable:Log of property tax revenue per capita over period: 1997-2002 2003-2006 2007-2010 2011-2013 (1) (2) (3) (4) (5) (6) (7) (⑧) Log guerrilla attacks per -0.0746#-0.0384*+ capita1988-1996 (0.0087) (0.0073) Log paramilitary attacks 0.07154 0.0367* per capita 1988-1996 (0.0089) (0.0072) Log guerrilla attacks per -0.0951**-0.0318* capita1997-2002 (0.0090) (0.0100) Log paramilitary attacks 0.0903* 0.0302* per capita 1997-2002 (0.0095) (0.0104) Log guerrilla attacks per -0.0708**-0.0173* capita2003-2006 (0.0130) (0.0082) Log paramilitary attacks 0.0643** 0.0137+ per capita 2003-2006 (0.0123) (0.0077) Log guerrilla attacks per -0.0655*-0.0120 capita2007-2010 (0.0248) (0.0074 Log paramilitary attacks 0.0472* 0.0078 per capita 2007-2010 (0.0219) (0.0067) Observations 986 986 1070 1070 1107 1107 1107 1107 R-squared 0.533 0.672 0.565 0.754 0.542 0.818 0.531 0.874 Controls 4号元 Depto.FE Pre-period tax revenueb Notes:Standard errors in parentheses are clustered at the department level;significance level:0.1%,1%.5%,and+10% refer to two-sided ftests.Outcome measured in constant 2008 Colombian pesos.aControls include royalties and transfers per capita; municipality area,elevation,distance to the department's capital;vote share by political party ideology;dummy variable on whether the municipality had no registered homicides in the same period as the attacks(independent variables);the number of military bases; the number of people displaced,driven out,and received by municipality due to conflict;average coca production;and an additive endowment index on the production of gold,silver,platinum,nickel,emeralds,and iron.Estimations include the pre-period property tax revenue per capita,that is,the period from 1985 to 1987 in column(2),from 1993 to 1996 in (4),from 2000 to 2002 in(6),and from 2003 to 2006 in(8),to pick up part of the enduring cross-sectional within-department differences. 是 as key determinants of contestation.One concern with property tax revenue,while violence by paramilitaries this approach is that we could simply be picking up en- is positively correlated with it. during cross-sectional within-department differences Table 2 focuses on four different time periods. correlated both with the presence of different armed Columns 1 and 2 show the relationship between logged groups as well as with the trajectory of tax revenues. total violence per capita from 1988-1996 on average To rule this out,we include a set of regressions con- logged tax revenues per capita in 1997 through 2002. trolling for tax revenue in the municipality at the end Columns 3 and 4 show the relationship between vio- of the period prior to each period in which cumulative lence in 1997-2002 and tax revenues in 2003 through violence is measured (TaxRevenuei.--1 in the nota- 2006.Columns 5 and 6 show the relationship be- tion above).When estimating the partial correlation of tween violence in 2003-2006 and tax revenues in 2007 tax revenue from 2003-2006 with violence from 1997- through 2010.Lastly,columns 7 and 8 show the rela- 2002,for example,we include a specification control- tionship between violence in 2007-2010 and tax rev- ling for tax revenues in 1993-1996,and so forth with enues from 2011 to 2013,the last period we have data the other time periods. for. Odd columns show that guerrilla attacks are nega- tively correlated with tax revenues,a relationship that RESULTS is statistically significant across the four periods.In contrast,cumulative past paramilitary attacks are pos- Violence and Tax Revenue itively correlated with tax revenues in every period Even columns show that the results for the first three As a first glance at armed groups'influence on tax in- conflict periods are robust to controlling for preperiod stitutions,we use specification Equation(1)to estimate tax revenues.Statistical significance is however attenu- the relationship between cumulative past violent ac- ated in the last period.This is consistent with the obser- tivity by armed groups and property tax revenue.As vation that paramilitary groups officially demobilized shown in Table 2,we find that violence perpetrated from 2003 to 2006(largely becoming criminal bands), by guerrillas is consistently negatively associated with and guerrilla groups were weakened from 2007 to 2010 1006Rafael Ch et al. TABLE 2. Cumulative Violence and Property Tax Performance Dependent variable: Log of property tax revenue per capita over period: 1997–2002 2003–2006 2007–2010 2011–2013 (1) (2) (3) (4) (5) (6) (7) (8) Log guerrilla attacks per capita 1988–1996 − 0.0746∗∗∗ − 0.0384∗∗∗ (0.0087) (0.0073) Log paramilitary attacks per capita 1988–1996 0.0715∗∗∗ 0.0367∗∗∗ (0.0089) (0.0072) Log guerrilla attacks per capita 1997–2002 − 0.0951∗∗∗ − 0.0318∗∗ (0.0090) (0.0100) Log paramilitary attacks per capita 1997–2002 0.0903∗∗∗ 0.0302∗∗ (0.0095) (0.0104) Log guerrilla attacks per capita 2003–2006 − 0.0708∗∗∗ − 0.0173∗ (0.0130) (0.0082) Log paramilitary attacks per capita 2003–2006 0.0643∗∗∗ 0.0137+ (0.0123) (0.0077) Log guerrilla attacks per capita 2007–2010 − 0.0655∗ − 0.0120 (0.0248) (0.0074) Log paramilitary attacks per capita 2007–2010 0.0472∗ 0.0078 (0.0219) (0.0067) Observations 986 986 1070 1070 1107 1107 1107 1107 R-squared 0.533 0.672 0.565 0.754 0.542 0.818 0.531 0.874 Controlsa √ √ √ √ √ √ √√ Depto. FE √ √ √ √ √ √ √√ Pre-period tax revenueb √ √ √√ Notes: Standard errors in parentheses are clustered at the department level; significance level: *∗* 0.1%, ** 1%, * 5%, and + 10% refer to two-sided t-tests. Outcome measured in constant 2008 Colombian pesos. aControls include royalties and transfers per capita; municipality area, elevation, distance to the department’s capital; vote share by political party ideology; dummy variable on whether the municipality had no registered homicides in the same period as the attacks (independent variables); the number of military bases; the number of people displaced, driven out, and received by municipality due to conflict; average coca production; and an additive endowment index on the production of gold, silver, platinum, nickel, emeralds, and iron. bEstimations include the pre-period property tax revenue per capita, that is, the period from 1985 to 1987 in column (2), from 1993 to 1996 in (4), from 2000 to 2002 in (6), and from 2003 to 2006 in (8), to pick up part of the enduring cross-sectional within-department differences. as key determinants of contestation. One concern with this approach is that we could simply be picking up en￾during cross-sectional within-department differences, correlated both with the presence of different armed groups as well as with the trajectory of tax revenues. To rule this out, we include a set of regressions con￾trolling for tax revenue in the municipality at the end of the period prior to each period in which cumulative violence is measured (TaxRevenuei, t −  − 1 in the nota￾tion above).When estimating the partial correlation of tax revenue from 2003–2006 with violence from 1997– 2002, for example, we include a specification control￾ling for tax revenues in 1993–1996, and so forth with the other time periods. RESULTS Violence and Tax Revenue As a first glance at armed groups’ influence on tax in￾stitutions, we use specification Equation (1) to estimate the relationship between cumulative past violent ac￾tivity by armed groups and property tax revenue. As shown in Table 2, we find that violence perpetrated by guerrillas is consistently negatively associated with property tax revenue, while violence by paramilitaries is positively correlated with it. Table 2 focuses on four different time periods. Columns 1 and 2 show the relationship between logged total violence per capita from 1988–1996 on average logged tax revenues per capita in 1997 through 2002. Columns 3 and 4 show the relationship between vio￾lence in 1997–2002 and tax revenues in 2003 through 2006. Columns 5 and 6 show the relationship be￾tween violence in 2003–2006 and tax revenues in 2007 through 2010. Lastly, columns 7 and 8 show the rela￾tionship between violence in 2007–2010 and tax rev￾enues from 2011 to 2013, the last period we have data for. Odd columns show that guerrilla attacks are nega￾tively correlated with tax revenues, a relationship that is statistically significant across the four periods. In contrast, cumulative past paramilitary attacks are pos￾itively correlated with tax revenues in every period. Even columns show that the results for the first three conflict periods are robust to controlling for preperiod tax revenues. Statistical significance is however attenu￾ated in the last period. This is consistent with the obser￾vation that paramilitary groups officially demobilized from 2003 to 2006 (largely becoming criminal bands), and guerrilla groups were weakened from 2007 to 2010 1006 Downloaded from https://www.cambridge.org/core. Shanghai JiaoTong University, on 26 Oct 2018 at 03:53:05, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/S0003055418000333