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Illicit economies, such as coca crops, provide an unparalleled source of wealth for insurgencies, paramilitaries, and criminal organizations. While state interventions such as forced aerial spraying eradication seek to weaken illicit economies and ultimately build political order, peace, and stability, outcomes on the ground typically diverge from these intentions. How do attempts at curtailing illicit markets at the origin of the production and trafficking chain shape dynamics of armed conflict violence? And once the state has intervene, how does its withdrawal affect subsequent levels of violence? By focusing on the case of Colombia, we study the effects of these type of interventions on armed conflict violence. First, we analyse municipal data of coca crops eradication by aerial spraying between 1994 and 2015, and find that it increased violent events associated to non-state armed actors. We then look at the sudden suspension of this policy and find that the state’s withdrawal increased, rather than decreased, subsequent levels of violence. Our work suggests that state coercive interventions that affect actors expectations regarding the availability and profitability of illicit resources are likely to backfire in the short term, provoking more violence.