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Decentralization and Bailouts in Colombia

Juan José Echavarría, Carolina Rentería and Roberto Steiner ()

No 1085, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper examines the decentralization process in Colombia, particularly as it relates to reforms embodied in the 1991 Constitution, and the bailouts of territorial entities that have occurred in subsequent years as a result of perverse incentive structures. The paper provides a summary of the basic features of the decentralization process in Colombia, including an analysis of revenue and expenditure assignments, the intergovernmental transfer system and recent developments in terms of territorial indebtedness. Specific case studies involve the determinants of three types of bailouts by the central government to territorial entities: the provision of soft loans to be used by departments to restructure their finances, the bailout of territorial entitities' education expenditures, and the Medellin Metro. The paper concludes with lessons learned and policy recommendations.

Keywords: public debt; fiscal relations; local government; bailouts; Medellin (search for similar items in EconPapers)
Date: 2010-12
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Related works:
Working Paper: Decentralization and Bailouts in Colombia (2002) Downloads
Working Paper: Decentralization and Bailouts in Colombia (2000) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:1085

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