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Decentralization in Colombia: Searching for social equity in a bumpy economic geography

Author

Listed:
  • Juan Mauricio Ramirez

    (Fedesarrollo, Colombia)

  • Yadira Diaz

    (ISER, University of Essex)

  • Juan Guillermo Bedoya

    (Fedesarrollo, Colombia)

Abstract
Colombia’s decentralization was conceived to improve population’s access to social services, reduce poverty and equalize well-being across the territory. However, after more than 20 years of its implementation a big gap across municipalities still remains. This paper analyses the impact of the Colombia’s fiscal decentralization process over the achievement of social minimums as depicted by the average multidimensional gap and the multidimensional deprivation headcount. We implement an instrumental variable spatial autoregressive model with spatial autoregressive disturbances to take into consideration the spatial interrelated behaviour of deprivation in the Colombian context. This, while accounting for the endogeneity that arises when evaluating the impact of fiscal decentralization. We find strong statistically significant results across all the proven specifications that confirm causal diminishing effect of the share of own resources over multidimensional deprivation. Counterfactual scenarios of spatially differentiated decentralization policies highlight their grater effectiveness over geographically mute designs.

Suggested Citation

  • Juan Mauricio Ramirez & Yadira Diaz & Juan Guillermo Bedoya, 2014. "Decentralization in Colombia: Searching for social equity in a bumpy economic geography," Working Papers 337, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2014-337
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2014-337.pdf
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    References listed on IDEAS

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    Cited by:

    1. Julio, Juan Manuel & Lozano, Ignacio, 2016. "Fiscal decentralization and economic growth in Colombia: evidence from regional-level panel data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    2. Leonardo Villar & Juan Mauricio Ramírez, 2014. "Infraestructura regional y pobreza rural," Working Papers Series. Documentos de Trabajo 11555, Fedesarrollo.
    3. Julio, Juan Manuel & Lozano, Ignacio, 2016. "Descentralización fiscal y crecimiento económico en Colombia: evidencia de datos de panel a nivel regional," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    4. Ignacio Lozano-Espitia & Juan Manuel Julio-Román, 2015. "Descentralización Fiscal y Crecimiento Económico: Evidencia Regional en Panel de Datos para Colombia," Borradores de Economia 865, Banco de la Republica de Colombia.
    5. Rojas Rivera, Angela Milena & Rengifo López, Juan Camilo, 2016. "Desarrollo económico y espacial desigual: panorama teórico y aproximaciones al caso colombiano," Borradores Departamento de Economía 15257, Universidad de Antioquia, CIE.
    6. Luis Ignacio Lozano-Espitia & Juan Manuel Julio-Román, 2015. "Fiscal Decentralization and Economic Growth: Evidence from Regional-Level Panel Data for Colombia," Borradores de Economia 12498, Banco de la Republica.

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    More about this item

    Keywords

    Decentralization; multidimensional poverty; social equity; economic geography; spatial interdependence; Colombia.;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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