We investigate the impact of a negative economic shock (coca eradication) on conflict and politics in Bolivia. We show that while the shock had no impact on conflict, it led to a sustained political response, particularly in areas characterized by the traditional political organization of the Ayllus. Since the Ayllus has roots in Inca colonization, we use the historical location of the Qhapaq Nan, the Great Inca Road, as an exogenous source of variation in the presence of the Ayllus. Our results suggest that the existing scholarship, by looking only at the average effects of negative economic shocks in certain parts of the world (Africa, Colombia) has under-conceptualized the background and institutional and political context.