The role of the sub-national public sector in the stabilization function: Evidence from the Colombian case for the period 1990-2001

Ligia Alba Melo-Becerra ()
Authors registered in the RePEc Author Service: Ligia Melo ()

Revista Finanzas y Politica Economica, 2015, vol. 7, issue 2, 299-324

Abstract: This paper analyses the impact of fiscal decentralization on the stabilization function. Although traditionally the stabilization function has been attributed to central government, regional and local authorities have a role to play in decentralized contexts. The analysis concentrates on the role that sub-national governments play in counteracting cyclical policy and on the relationship between decentralization and the fiscal position of national and sub-national governments. In particular, the stabilization and redistribution obtained by regions as a result of national tax policy and through the intergovernmental transfers system is estimated for Colombia, where deficits increased substantially both at national and local levels after the decentralization process was strengthened in 1991.******El objetivo del documento es analizar el impacto de la descentralización fiscal en la función de estabilización. Aunque tradicionalmente la función de estabilización se ha atribuido al gobierno central, las autoridades regionales y locales desempenan un papel en esta función en un contexto descentralizado. El análisis se centra en el papel que los gobiernos sub-nacionales desempenan para contrarrestar la política cíclica y en la relación entre descentralización y la posición fiscal de los gobiernos nacionales y subnacionales. En particular, la estabilización y redistribución que las regiones obtienen mediante la política tributaria nacional y el sistema de transferencias intergubernamentales se estima para Colombia, donde los déficit aumentaron sustancialmente, tanto a nivel nacional como local después de que el proceso de descentralización se fortaleció en 1991.

Keywords: Fiscal decentralization; stabilization; intergovernmental transfers; sub- national governments (search for similar items in EconPapers)
JEL-codes: E6 H7 H77 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:col:000443:014134

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