Sweet deals: Construction and legislation in Colombia

Jan. 28, 2022

By Juan S. Morales, Assistant Professor, Economics

In representative democracies, leaders rely on policymakers to advance their political goals. Yet different government actors often have different objectives and preferences. For example, a conservative representative may not be supportive of legalizing cannabis or expanding abortion rights.

To advance political aims, leaders negotiate with other politicians, looking for areas of compromise or by disbursing targeted benefits. But many of these negotiations happen behind closed doors, making it difficult for social scientists to study these relationships. Furthermore, political deals hidden from public view may undermine democratic norms, especially in contexts with high levels of corruption and poor governance.

In a recently published paper in the Review of Economics and Statistics, “Jam-barrel Politics”, my co-author Leonardo Bonilla-Mejía and I study these types of hidden arrangements in a unique setting. In 2013, Colombian news media “leaked” a spreadsheet that revealed road construction projects which were assigned to individual legislators. In Colombia, this disbursement of benefits has been colloquially called “mermelada,” or jam. Critics of the government asserted that this was evidence of clientelism and corruption. The government claimed these deals were not uncommon in politics and a way to bring investments to different regions of the country.

To investigate this case, we first developed a theoretical model of “jam” in which political leaders use targeted benefits to sway legislators in favour of their political agenda. One important feature of the model is that some legislators like jam more than others. In the context of Colombia, legislators from remote regions would benefit more from jam, firstly because these road projects can have larger impacts in these regions, but secondly, and more worryingly, because watchdog institutions and government accountability are weaker.

Then, we collected data from these road construction projects and congressional votes by these legislators. We applied a series of statistical analyses to understand these hidden arrangements and their potential consequences for economic development and policymaking.

We found that road projects in remote regions of the country were generally associated with changes in economic development (as measured by satellite night lights, a common proxy for economic activity). However, projects which appeared in the media leak were more expensive than similar projects (in their costs per kilometre) and were not associated with any excess economic returns. 

We also found that “swing” legislators – those that did not generally either support or oppose the government in congress – were more likely to appear in the leak, which was consistent with the idea that the government was using these jam contracts to sway legislators in favour of its agenda.

Finally, we found that, indeed, in the months after these contracts were signed, politicians from remote regions became more supportive of the government in the legislature.

Our study reveals some of the hidden ways in which politics takes place and its consequences. We show how political leaders can advance their agenda sometimes at the expense of citizens in remote regions, who often have weaker political representation. More importantly, governments should be transparent about how resources are allocated to ensure that the benefits of future projects are equitably distributed.

More broadly, I work in the fields of political economy and development economics. My research studies how democratic institutions transform the preferences of citizens into policy, and the different factors that could affect this process. These factors include media, violence and legislative behaviour, among others. For more information on my work, visit my website.