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Let’s not get it twisted: if the headline were something to the effect of “the Colombian government paid its soldiers to murder whomever they could credibly claim were rebels” and the econometric analysis were the same, this wouldn’t necessarily be so dunk-worthy (that said AEA decided to be dicks and paywall the paper so I haven’t had a chance to read it yet). Without a penalty for killing false positives, of course that’ll result in an awful incentive structure with a horrible outcome!
Of course since we’re talking about a paper coauthored by Acemoglu - an MIT economist who famously described the European settlers’ rape and pillage of the Americas and Africa as a “reversal of fortune”, euphemistically and underwhelmingly describing colonization and slavery as “changes in institutions” - interpreting the spike in the state-murder outcome in Colombia as the result of mere incompetence producing “bad incentives” is hardly surprising.
For those wondering what the hell Acemoglu et al. actually mean by “institutions”:
“As we discuss in more detail below, we hypothesize that a cluster of institutions ensuring secure property rights for a broad cross section of society, which we refer to as institutions of private property, are essential for investment incentives and successful economic performance. In contrast, extractive institutions, which concentrate power in the hands of a small elite and create a high risk of expropriation for the majority of the population, are likely to discourage investment and economic development. Extractive institutions, despite their adverse effects on aggregate performance, may emerge as equilibrium institutions because they increase the rents captured by the groups that hold political power.”
In the historical context, Acemoglu and friends correctly consider feudalism and chattel slavery to be “extractive” and forms of rent-seeking, and yet wage-capitalism (or, at least, competitive wage-capitalism), rooted in private property “rights”, is somehow not. Never mind that the above-quoted definition of “extractive institutions” perfectly describes oligopolistic late-stage capitalism which still retains protection of private property as a core feature. This paper is taught to first-year grad students, by the way.