Sources of Revenue and Government Performance: Evidence from Colombia

Martı́nez, Luis

doi:10.2139/ssrn.3273001

Cited by 63 publications

(89 citation statements)

References 33 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%

“…The most successful regions were those that increased local revenue. In fact, investments funded with local taxes have significantly larger impacts on public good provision, economic growth and poverty reduction, than those funded with subnational transfers (Faguet and Sánchez, 2014;Lozano and Julio, 2015;Martínez, 2017;Ramírez et al, 2017;Sánchez and Pachón, 2017). This is particularly true for royalties, which have consistently reduced fiscal effort (Bonet et al, 2014;Ramírez and Bedoya, 2014) and promoted rent-seeking behavior in mining regions (Martínez, 2017).…”

Section: Subnational Transfersmentioning

confidence: 99%

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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%

Section: Subnational Transfersmentioning

confidence: 99%

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

Bonilla‐Mejía¹,

Higuera-Mendieta²

2017

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“…Also, Dube and Vargas (2013) found for Colombia increases in violence coming from falls in coffee prices and from increases in oil prices. For royalties in particular, Martínez (2016) found that increases in these revenues do not explain improvements in public services nor in their accountability. As a result, the expected effect of oil prices on socio-economic indicators is ambiguous since, in the one hand, it generates incentives to increase violence and reduce school attendance and, on the other, it expands the fiscal constraint and public investment.…”

Section: Introductionmentioning

confidence: 89%

Oil booms and subnational public investment: a case-study for Colombia

Pérez-Valbuena¹,

Marín-Llanes²,

Bonet³

2019

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Theoretical and empirical studies on oil price shocks have mainly focused on measuring its relationship with macroeconomic performance in developing countries. However, the literature has not explored causal effects of oil price variations on subnational public investment. Using a difference-in-differences strategy, this paper contributes to the literature in identifying these effects for both, departments and municipalities in Colombia. Our results suggest that the most recent oil boom, brought by the rise in international oil prices, had mostly positive and disproportionate effects of public investment on oil producing departments and municipalities. On one hand, departments prioritized their investments in five sectors: recreation and sports, agriculture, transportation, attention to vulnerable population, and justice. On the other hand, for municipalities, four sectors were the most benefited: institutional strengthening, justice, equipment, and recreation and sports.

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“…La evidencia indica que la descentralización efectivamente mejoró la provisión de servicios públicos, pero más que todo en los municipios que hicieron esfuerzos fiscales importantes. En los municipios altamente dependientes del gobierno nacional y en particular aquellos que reciben regalías, el efecto fue adverso (Faguet y Sánchez, 2014;Martínez, 2017;Sánchez y Pachón, 2017). En cuanto a la apertura política, la evidencia muestra que en muchos casos lo que se crearon fueron microempresas electorales cuyoúnico objetivo es capturar rentas (Pizarro, 2002).…”

Section: Gráfico 1 Concentración De Tierras E Informalidad En Titulaciónunclassified

Notas sobre la Economía Política del Caribe Colombiano

Bonilla‐Mejía¹,

Higuera-Mendieta²

2018

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El persistente rezago del Caribe Colombiano en términos de desarrollo económico se debe en parte a la baja calidad de sus instituciones. Este trabajo hace una revisión de los estudios recientes sobre la economía política de la región y resalta algunos de los factores más relevantes.Entre estos se destacan los efectos de las transformaciones en la estructura económica regional, las reformas políticas y administrativas nacionales, la interdependencia entre la política regional y nacional, y el uso sistemático de la violencia. Las medidas disponibles tienden a reflejar el mal estado de las instituciones, siendo la región una de las peores calificadas en términos de desempeño fiscal, gobierno abierto y delitos electorales. A pesar de esto, la percepción de corrupción es relativamente baja y, en comparación con otras regiones, hay mayor tolerancia frente a algunas de estas prácticas. Esto podría estar reflejando un mayor grado de naturalización del fenómeno. AbstractThe Caribean region is persistently lagged behind in terms of economic development and this is partly due to the poor quality of institutions. This paper reviews recent literature regarding the political economy of the region, and highlights some of the most relevant factors, including regional economic shifts, national political and administrative reforms, the interdependence between regional and national politics, and the systematic use of violence.Available measures tend to confirm that local institutions are ranked among the worst in the nation, with particularly low scores in fiscal capacity, transparency, and electoral crimes. In spite of this, perceived corruption remains relatively low and some of these practices are more tolerated than in the rest of the country. This may reflect a greater degree of internalization of corrupt behavior.

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Sources of Revenue and Government Performance: Evidence from Colombia

Cited by 63 publications

References 33 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

Oil booms and subnational public investment: a case-study for Colombia

Notas sobre la Economía Política del Caribe Colombiano

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