Growth Determinants for Colombia: National and Regional Panel Data Evidence, 1964-2002

The purpose of this paper is to empirically test the growth factors for the Latin American country of Colombia over the last half century. Fixed effects panel data estimation for all thirty-three Colombian states indicate a significantly positive relationship between labor growth and international trade on income growth. However, crimes against private property rights and capital significantly reduce income growth over the time-series, indicating that protection of property rights are an important determinant of economic growth and prosperity as discussed by North and Thomas (1973) and De Soto (1990, 2000). The results also show that institutional instability reduces economic growth.