Note: This article is an abridged version of an in-depth country study produced as part of the Prosperity Index project of the Legatum Institute. Complete versions of all 12 are available on the Institute website.
Colombia has emerged from its violent, chaotic past, and is ready to join the club of nations that respect human rights, share power with the people, and offer a decent -- and rising -- standard of living.... Or maybe not.
Colombia is the embodiment of paradox. On the continent that has defined macroeconomic volatility, Colombia has managed incredible stability. Since the 1930s it never experienced a year of negative economic growth until 1999. And in the 20th century it has never had a problem with inflation. Moreover, while democracy was collapsing everywhere in Latin America in the 1930s, power changed hands in Colombia (from the Conservative Party to the Liberal Party) in a free election. And, apart from a short spell in the 1950s, Colombia has neither been the victim of a political coup nor lived under the yoke of a military government.
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Yet the gains that should have followed from economic stability and political pluralism never materialized. Though Colombia has been growing virtually non-stop since 1900, the pace has been deliberate. Indeed, on average it has grown no faster across the business cycle than volatile Latin American countries like Peru or Bolivia.
Moreover, while Colombian democracy has endured, Colombia hasn't fared well by other measures of societal stability. The murder rate has been the highest in the world for over the last half-century. But murder isn't Colombia's only symptom of social dysfunction. The country has been fighting a civil war with leftist guerillas continuously since at least 1964. And in the early 1980s, Colombia became ground zero for the international drug trade, home to the cocaine cartels. It should be no surprise, then, that Colombia ranks 136 on the Legatum Institute Prosperity Index's safety-and-security sub-index -- the lowest in the Americas by far.
Liberal Party politician Dario Echandía once quipped that Colombian democracy was like "an orangutan in a tuxedo." By this he meant that, in Colombia, the civilized and uncivilized, the orderly and chaotic, the legal and illegal, all coexist -- and the membrane separating them is often very porous. Indeed, opposites seem to interact in ways that perpetuate an equilibrium in which both exist. The tuxedo promotes democracy and macroeconomic stability, while the orangutan generates violence, civil war, drug dealing, and anemic economic growth.