Land tenure, price shocks, and insurgency: Evidence from Peru and Colombia

•Risk-sharing land arrangements moderate income volatility from international markets.•Areas with more shared land arrangements see smaller increase in conflict during negative income shocks.•Decline in coffee price increased conflict among individual farm owners in Peru and Colombia. The paper examines how property arrangements – a key determinant of rural income – influence armed conflict in the presence of commodity price shocks. Using detailed data on district level land tenure, crop produce, and conflict intensity in Peru and Colombia, estimates show that exogenous negative price shocks increase the intensity of conflict in districts with a greater presence of individual ownership, relative to other types of land tenure. The finding is consistent with small landowners in the export sector experiencing a sharper downturn in labor market outcomes thus reducing the opportunity cost of participating in insurgent groups.