Fiscal Decentralization and Economic Growth: Evidence from Regional-Level Panel Data for Colombia

Ignacio Lozano-Espitia and Juan Julio

No 12498, Borradores de Economia from Banco de la Republica

Abstract: This paper provides evidence on the positive role of fiscal decentralization on regional economic growth in Colombia since the promulgation of the Political Constitution of 1991. The empirical strategy involved the choice of a suitable estimator for the panel data approach, the Augmented Mean Group Estimator, which allows adding unobserved determinants suggested by literature to traditional long term explanatory factors. The strategy was complemented with exercises that helped us to support the results coming from (i) cross-section models for different periods and various control variables, (ii) test on the complementarity hypothesis between public goods provided by different jurisdictions (spillover effects), and (iii) an assessment of unconditional convergence in regional income differences.

Keywords: Fiscal decentralization; Economic growth; Complementarity; Panel Data Models (search for similar items in EconPapers)
JEL-codes: C33 H77 O40 (search for similar items in EconPapers)
Pages: 25
Date: 2015-02-03
New Economics Papers: this item is included in nep-fdg, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.banrep.gov.co/sites/default/files/publicaciones/archivos/be_865.pdf

Related works:
Working Paper: Fiscal Decentralization and Economic Growth: Evidence from Regional-Level Panel Data for Colombia (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:012498

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