Public Healthcare Financing during Counterinsurgency Efforts: Evidence from Colombia*

How do government counterinsurgency efforts affect local public health financing during civil conflicts? We investigate this question in the context of the protracted conflict in Colombia. Using data on antinarcotics operations and health transfers from the central government to municipal governments, we employ both panel estimations and an instrumental variable to address concerns of endogeneity. We first show evidence of a government discretionary power over the allocation of health transfers. We do not find evidence that counterinsurgency operations causally affect health transfers to municipalities. Our results rule out political alignment between mayors and the national governing party as an intermediary factor that could influence the flow of fiscal transfers in municipalities exposed to the conflict.