The Territorial Fiscal Gap in Colombia

Jaime Bonet and Jhorland Ayala-García

Documentos de trabajo sobre Economía Regional y Urbana from Banco de la Republica de Colombia

Abstract: This paper presents an estimation of expenditure needs and fiscal capacity of Colombia’s municipalities and departments in 2014. We use standard per capita norms to estimate the spending needs and data envelopment analysis for the local fiscal capacity. The results show that: (i) there are high horizontal fiscal disparities in Colombia, with greater incidence in municipalities than in departments; (ii) these disparities favor more developed territories; and (iii) there is evidence of a centerperiphery pattern in the horizontal fiscal disparities, causing central regions of the country to have a lower imbalance between expenditure needs and fiscal capacity. An equalization transfers system is an option for public policy to eliminate these disparities.

Keywords: horizontal fiscal disparities; fiscal capacity; fiscal needs; data envelopment analysis (search for similar items in EconPapers)
JEL-codes: H71 H73 H77 R12 (search for similar items in EconPapers)
Pages: 39
Date: 2017-03
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://doi.org/10.32468/dtseru.251 (application/pdf)

Related works:
Journal Article: The territorial fiscal gap in Colombia (2020)
Working Paper: The Territorial Fiscal Gap in Colombia (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bdr:region:251

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