Essays on the Economics of Conflict and Crime

Abstract

This thesis comprises three chapters that examine the interplay between economic shocks and conflict, utilizing both theoretical and empirical approaches. The first chapter provides quantitative evidence on the relationship between gold mining expansion and violent conflict in Colombia, using three different measures of gold mining activity across two distinct periods: the Gold Rush (2004-2014) and the Post-Gold Rush (2014-2022). It exploits the exogeneity of international gold prices and geochemical anomalies to identify causal effects. The second chapter analyzes the unexpected rise in homicide rates in the United States during the COVID-19 pandemic. It proposes a theory linking unemployment and unemployment compensation generosity to violent incidents. Empirically, this relationship is analyzed by exploiting variations in how unemployment benefits were distributed across states in 2020. The third chapter develops a theoretical framework to explore conflict arising from the dynamics of interpersonal loans, incorporating asymmetric information, income shocks faced by borrowers, and strategic defaulting. The model's implications are extended to a population level. This dissertation makes several contributions to the economic literature, particularly to the economics of conflict.