One explanation for the increasing number of hectares with coca cultivation is that
eradication strategies displace coca crops but fail to completely clear affected areas. In
the drug policy literature, that dynamic shifting is commonly known as the balloon effect.
This study integrates georeferenced agricultural data through spatially explicit
econometric models to tests the hypothesis that forced eradication generates spillover
effects. Using annual data for 1,116 contiguous municipalities in Colombia between 2001
and 2010, we estimate a spatial Durbin model (SDM) with municipal and time fixed
effects. At municipal level, we find no evidence of the balloon effect. Our results suggest
that aerial eradication activities in a municipality reduce the new area under coca
cultivation by 8 percent inside that municipality and by 3 percent in neighboring
municipalities. Therefore, and contrary to the balloon effect hypothesis aerial eradication
generates negative spillover effects. Our results provide deeper insights for policy design.
In our analysis, we are able to distinguish between the change in coca cultivation as a
result of eradication activities inside and outside the municipality
