Fiscal decentralization and economic growth in Colombia: Evidence from regional-level panel data

Lozano, Ignacio; Julio, Juan

doi:10.18356/d80b22b8-en

Cited by 11 publications

(11 citation statements)

References 28 publications

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“…Finally, our results show that politically driven transfers have no impact on local economic development, contributing to a growing literature on the efficiency of subnational transfers (Bonet et al, 2014;Borrella, 2015;Das, 2017;Faguet and Sánchez, 2014;Lozano and Julio, 2015;Martínez, 2017;Ramírez et al, 2017;Sánchez and Pachón, 2017). We test whether this could be due to institutional factors, finding no evidence that political alignment affects different measures of government performance, law enforcement, and disciplinary prosecutions.…”

Section: Introductionsupporting

confidence: 66%

Political alignment in the time of weak parties : electoral advantages and subnational transfers in Colombia

Bonilla‐Mejía¹,

Higuera-Mendieta²

2017

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This paper explores the effect of alignment between local and national politics in a context of weak parties. Based on a regression discontinuity design in close elections, we find that, in absence of strong parties, presidential coalitions become the focal point of political alignment in Colombia. In fact, while parties provide almost no electoral advantages to their members, candidates aspiring to national positions get significantly more votes in municipalities governed by mayors aligned with the incoming presidential coalitions. In turn, aligned mayors receive additional discretionary transfers from the National Government to finance road investments. These discretionary transfers, however, do not translate into local economic growth. ResumenEste documento explora el efecto de alineación entre politicos locales y nacionales en un contexto de partidos débiles. Utilizando métodos de regresión discontinua en elecciones reñidas, encontramos que en ausencia de partidos fuertes, las coaliciones presidenciales se convierten en los ejes de la alineación política en Colombia. De hecho, mientras que los partidos políticos proveen muy pocas ventajas electorales a sus miembros, los candidatos de la coalición a posiciones nacionales obtienen muchos más votos en municipios gobernados por alcaldes alineados. A su vez, los alcaldes alineados reciben más transferencias discrecionales para financiar carreteras por parte del gobierno nacional. Estas transferencias, sin embargo, no se traducen en mayor crecimiento económico en los municipios.Palabras clave: Alineación política, elcciones, transferencias subnacionales, regresión discontinua Clasificaciión JEL: D72, H72, H77, R11 3 The Regional Development and Regional Compensation Funds account for at least 40% of the royalties and prioritizes high impact projects in the poorest regions. Resources are allocated by regional committees,Órganos Colegiados de Administración y Decisión (OCAD), in which national and local officers evaluate and select the projects. 4 There is a long tradition of discretionary transfers in Colombia. Co-financing funds are among the most recent ones, replacing the Auxilios Parlamentarios, parliamentary funds that were eliminated in 1991 in an attempt to eradicate pork-barrel politics Brun and Diamond (2014); Cárdenas et al. (2006). 7

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Section: Introductionsupporting

confidence: 66%

Political alignment in the time of weak parties : electoral advantages and subnational transfers in Colombia

Bonilla‐Mejía¹,

Higuera-Mendieta²

2017

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“…where y it is the GDP per capital for each country and year, it Z -fiscal decentralization measure (FDI) for each country and year, it X -quantitative indicators -is a set of six control variables that were found to be significant in almost all economic growth researches (Nguyen, Anwar 2011;Baskaran, Feld 2013;Cantarero, Gonzalez 2009;Stoilova, Patonov 2012;Gemmel et al 2013;Yushkov 2015;Lazano, Julio 2015).…”

Section: Methodsmentioning

confidence: 99%

Fiscal Decentralization and Economic Growth in Selected European Countries

Slavinskaitė

2017

Journal of Business Economics and Management

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Abstract. The paper analyses the fiscal decentralization effects on economic growth in unitary countries of European Union for the period 2005-2014. The empirical analysis was based on the multiple regression method. The fixed effect panel model was used as framework for the analysis. In order to examine the different impact of fiscal decentralization, the same analysis was applied to subsets of countries categorized into two groups according to countries' level of economic development. This further analysis found that there is positive relationship between fiscal decentralization and economic growth in low level of economically developing countries and no relationship in high level of economically developed countries. These results suggested that fiscal decentralization is not always instrument for promotion of economic growth, which means that country's economic development level is an important factor when introducing reform of fiscal decentralization. The originality of this article -new fiscal decentralization index and evaluated fiscal decentralization level influence for countries economic growth.

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“…Barro endogenous model was adopted as a appropriate analytical framework to investigate the impact of fiscal decentralisation on economic growth (Davoodi & Zou 1998;Akai & Sakata 2002;Baskaran & Feld 2009;Gommell et al 2013;Lozano & Julio 2015, Filippeti & Sacchi 2016). …”

Section: Methodsmentioning

confidence: 99%

Fiscal decentralisation and economic growth: Is there a relationship?

Slavinskaitė

2017

PROSOC

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The main objective of this paper is to study the concept of fiscal decentralisation and the influence of fiscal decentralisation on economic growth in selected European Union countries during the period of 2004 -2014. Academic interest in fiscal decentralisation began in the 1950s, when the original Tiebout (1950) article on the theory of local government management level cost created a base for never-ending debate about fiscal decentralisation effect on well-being of the country. The empirical literature analysing the influence of fiscal decentralisation on economic growth has emerged since the 1990s. The relevant studies vary as to whether they use time series, cross-sectional or panel data, as to whether they rely on singlecountry or cross-country samples, and they vary in fiscal decentralisation measures, estimation methods and sample composition. The empirical analysis was based on the method of Simple Additive Weighting (SAW) and regression analysis. The data analysis has revealed that there is a relationship between fiscal decentralisation and economic growth.

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Fiscal decentralization and economic growth in Colombia: Evidence from regional-level panel data

Cited by 11 publications

References 28 publications

Political alignment in the time of weak parties : electoral advantages and subnational transfers in Colombia

Political alignment in the time of weak parties : electoral advantages and subnational transfers in Colombia

Fiscal Decentralization and Economic Growth in Selected European Countries

Fiscal decentralisation and economic growth: Is there a relationship?

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