This article reports the results of an econometric evaluation of the effects of Plan Colombia, the largest US aid package ever received by a country in the western hemisphere. We assess how the aerial spraying of illegal crops affects both the size of the land cultivated with coca bushes as well as the dynamics of localized violence in the context of Colombia’s armed conflict. In particular, we show that the marginal effect of spraying one acre of coca reduces the cultivated area by about 11 percent of an acre. Since aerial spraying may shift coca crops to neighboring municipalities, this result should be interpreted as an upper bound, or at best local effect. To study the impact on conflict dynamics, we examine both the short-term and the long-term effects of crop spraying. Our results suggest that guerrilla-led violence increases both in the short and the long term. We interpret this result as evidence that the guerrilla tries to hold on violently
to the control of an asset that is of first order importance for their survival.