La economía va bien, pero el país va mal – The economy is doing well, but the country is doing badly
In 1987, when Fabio Echeverry Correa, then president of Colombia’s largest business association, used these words, he was describing a country where macroeconomic stability coexisted with the expansion of drug trafficking, a corrupt and clientelist political system, and an ongoing armed conflict. Nearly four decades later, this phrase still captures one of the most enduring paradoxes of Colombian development.
During the 2000s, Colombia became one of Latin America’s economic success stories. Growth accelerated, foreign direct investment multiplied, and international financial institutions praised the country’s macroeconomic stability. Colombia was even included among the CIVETS[i], a group of emerging economies expected to become the next engines of global growth. International investors increasingly viewed the country as a safe and promising destination for capital.
Yet this success story had another side. The beginning of this same decade witnessed the rapid expansion of paramilitary territorial control[ii], millions of hectares of land were violently appropriated, and more than six million Colombians were forcibly displaced. In 2006, the parapolitics scandal exposed the extensive collaboration between elected politicians and paramilitary organizations, eventually leading to the conviction of dozens of members of Congress. Far from being marginal actors, illegal armed groups had become deeply entangled with regional and central political power.
Were these simply parallel stories? How could these seemingly contradictory realities coexist? Did Colombia achieve economic success despite armed conflict and paramilitary violence? Or were they part of the same political-economic order? This is the puzzle that motivates my doctoral research on Colombia’s political economy during the 2000s and 2010s.
Beyond Institutions as Engines of Growth
Mainstream institutional economic literature often explains socioeconomic outcomes through institutions assumed to foster economic efficiency and growth. From this perspective, violence, corruption, and illicit economies appear as institutional failures that hinder development and prevent good governance.
Scholarship on Colombia has gone further. For instance, Leopoldo Fergusson, referencing Nobel prize winners: Daron Acemoglu, Simon Johnson, and James Robinson, showed that armed conflict and illicit economies have become embedded in Colombia’s political economy because they generate political rents and economic opportunities for powerful actors. However, this still leaves us with a problem. Institutions permeated by armed conflict and illicit economies cannot be explained solely by economic efficiency.
My research takes a different approach. Instead of asking whether institutions promote growth, it asks which social groups benefit from existing institutions, how these groups sustain these institutions politically, and how institutions reproduce a particular socioeconomic order over time.
To answer these questions, I use the approach to institutional change by Bruno Amable and Stefano Palombarini, particularly their concept of the Dominant Social Bloc (DSB). Rather than viewing institutions as neutral arrangements designed to maximize efficiency, this approach sees them as the result of a political strategy that accommodates the demands of social groups capable of providing political support and wielding political influence. A socioeconomic order endures not because it is efficient but because it is backed by a coalition of actors who benefit from it and can reproduce it politically.
From this perspective, the key issue is no longer whether Colombia’s institutions were “good” or “bad” for growth. The question becomes: what kind of accumulation regime was consolidated in Colombia during the 2000s, which groups benefited from it, and how was it politically sustained?
Violence as a Condition of Accumulation
Applying this framework to Colombia required moving beyond the European contexts in which it was originally developed. Colombia’s political economy has long been shaped by structural economic dependency, the extraction and commercialization of natural resources, armed conflict and illicit economies. These are not external distortions. Rather, they are part of the terrain on which political and economic power has been organized.
During the 2000s, Colombia’s accumulation regime became increasingly dependent on fossil fuel extraction, the financial sector, and foreign capital. Like several Latin American countries, Colombia benefited from the global commodity boom. However, unlike the “pink tide” governments that emerged elsewhere in the region, Colombia followed a different path under Álvaro Uribe Vélez in 2002, pursuing market-oriented policies combined with an increasingly militarized political strategy.
Uribe’s Democratic Security presented military victory over insurgent groups as a precondition for improving security[iii], boosting investors’ confidence and attracting foreign capital. Security became inseparable from accumulation. The promise of investment and growth justified rising military spending, strengthening coercive institutions, and framing social protest and political dissent in terms of internal security.
But coercion alone cannot explain the stability of this order.
My research suggests that, in the 2000s Colombia’s dominant social bloc brought together a coalition of domestic and foreign capital, large landowners and, crucially, actors linked to paramilitary organizations and illicit economies. These groups did not necessarily agree on everything. Yet, they shared an interest in preserving an accumulation regime based on extractive expansion, financial liberalization and unequal property relations.
This shifts the way we understand the Colombian paradox. Armed conflict and illicit economies were partly constitutive of the political conditions under which the socioeconomic order was reproduced. Violence not only protected the accumulation regime but also helped shape the coalition of power that sustained it.
A Fragile Bloc
Dominant social blocs are never permanent. They depend on maintaining political support while accommodating the interests of their constituent groups. When these conditions change, internal tensions begin to surface.
This became increasingly visible during Juan Manuel Santos’ presidency. Two developments fundamentally altered the conditions that had sustained the existing order. First, international commodity prices collapsed, weakening the economic foundation of extractive accumulation. Second, Santos replaced military confrontation with peace negotiations with guerrillas, which challenged the security strategy that had helped hold the dominant coalition together.
These changes exposed significant divisions among Colombia’s ruling groups. While important business sectors supported the peace process, others, including those closely tied to large landowners and paramilitary interests, strongly opposed it. What had previously appeared to be a unified coalition increasingly revealed itself to be politically fragmented.
The nationwide protests of 2019 were perhaps the clearest expression of this growing crisis. Even before Colombia elected its first left-wing president in 2022, the political settlement that had dominated the previous two decades was already showing signs of exhaustion.
Why does this matter beyond Colombia?
Because it suggests that violence is not always an obstacle to development. Under certain conditions, violence and illicit economies can become integral to capitalist accumulation itself. Instead of existing outside the economy, they may actively shape the political coalitions on which particular accumulation regimes depend.
This insight resonates far beyond Colombia. In many parts of the world, extractive development, punitive security agendas, and the criminalization of dissent are advancing together. To understand how these processes become politically stabilized, we must move beyond institutions alone and pay closer attention to the power coalitions that sustain them.
These questions have acquired renewed urgency in Colombia itself. The recent election of Abelardo de la Espriella, who campaigned on a platform of hard-line security policies, renewed extractive development, and aggressive attacks on political opponents, raises important questions about historical continuity. Are we witnessing the formation of a new dominant social bloc, or the reconfiguration of an older one? My dissertation does not provide definitive answers to that question. But it suggests that if we want to understand Colombia’s future, we first need to rethink the political economy of its recent past.
Under certain conditions, violence does not simply accompany accumulation. It helps make it possible.
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[i] CIVETS stands for Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa.
[ii] In Colombia, paramilitaries refer to illegal armed groups that defend against guerrilla attacks and use weapons to protect land, property, and the prevailing status quo. This includes the assassination of perceived enemies and political opponents.
[iii] Insurgent groups carried out attacks on the infrastructure of large corporations and engaged in extortion and kidnapping of top executives. Reducing these activities increased investor confidence.
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