Academic journal article Business: Theory and Practice

Institutional Strength, Peacebuilding, and Productive Entrepreneurship - Exploratory Analysis in Colombia

Academic journal article Business: Theory and Practice

Institutional Strength, Peacebuilding, and Productive Entrepreneurship - Exploratory Analysis in Colombia

Article excerpt

Introduction

The differences in long-term growth among and within nations are strongly influenced by institutions (Acemoglu et al. 2005, Acemoglu and Robinson 2008). Institutions are inclusive or extractive rules or norms that shape social, political, and economic interactions (Acemoglu and Robinson 2012, Hall and Taylor 1996, North 1991, Ostrom 1986, Scott 2004, Williamson 1985). In Colombia, institutions have been historically extractive (Acemoglu and Robinson 2012) producing two structural problems: 1) destructive entrepreneurship; and 2) armed conflict.

First, Baumol (1996) argued that inclusive institutions would generate productive entrepreneurship and extractive institutions would generate unproductive and destructive entrepreneurship. For instance, during 17th-18th centuries, Colombian municipalities wherein an extractive institution such as slavery was intensively enforced, continue to experience, until recent years, increased poverty reduced school enrolment, low vaccination coverage, and reduced provision of public goods (Acemoglu et al. 2012). Second, Collier and Hoeffler (2004) and Koubi et al. (2014) stated that the availability of renewable and non-renewable resources in a given territory has more explanatory power to determine the causes of civil wars, than grievances (e.g. inequality lack of political rights, or ethnic and religious divisions). Nevertheless, illegal armed groups in Colombia (e.g. Fuerzas Armadas Revolucionarias de Colombia [FARC] or Ejercito de Liberacion Nacional [ELN]) emerged due to grievances caused by extractive institutions, such as restricted political participation (Nasi 2012). Until today the effects of the armed conflict in Colombian people have been devastating: 218,094 deaths; 27,023 kidnappings; 1,982 massacres; and 6.9 million internally displaced persons {Centro Nacional de Memoria Historica [National Center of'History and Memory] 2013, UNHCR 2016).

In spite of those events, the days to come may hold a brighter but complex future though. Colombian government and the FARC, the oldest guerrilla movement in the continent, signed a peace agreement after more than four years of negotiation; but Colombian voters rej ected the referendum for peace which was proposed by the government to pursue citizens' endorsement. Currently, both government and congress are discussing strategies to enforce the peace agreement through afast-track mechanism. As noted, peace-making, peacekeeping, andpeace-buildingprocesses as everlasting and collective work in progress towards a desired future, are complex (Boutros-Ghali 1992, Lederach 1997) and need to include factors such as institutions and productive entrepreneurship (Lederach 1997, International Alert 2006, Mehlum et al. 2006) as crucial conditions to strengthen both peacebuilding processes and long-term growth (Rettberg et al. 2011).

To contribute to this historical moment from an empirical approach, the purpose of this study is to conduct a diagnosis in which institutional strength, peacebuilding and productive entrepreneurship are discussed 1) individually by means of a performance ranking on each topic, and 2) jointly by means of correlations. Also, this study aims to enrich the resources available for practitioners and scholars interested in key topics for (post)conflict countries/territories. To achieve this, three composite indices were constructed based upon international assessments or seminal studies, namely: 1) Institutional Strength Index; 2) Peace Building Index; and 3) Productive Entrepreneurship Index. After this introduction, we present an illustrative literature review. Next, the methodological strategy to elaborate the indices is presented. Then, the results are reported. Finally, the conclusions and limitations of the study are discussed.

1. Literature review

Colombian armed-conflict has been intensively studied by local and international scholars, national and international NGOs, multilateral organisms, and the Colombian state itself. …

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