The Territorial Fiscal Gap in Colombia


Series: 
Documentos de Trabajo sobre Economía Regional
Number: 
251
03
March
2017
Author(s) / Editor(s): 
Jaime Bonet
Jhorland Ayala
[email protected]
Publishing House: 
Banco de la República
JEL Classification: 

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 center-periphery 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.

Category / Classification: 
Documentos en elaboración

Contenido disponible en / Available in:

  • Español
  • English

This document has been translated into English for informational purposes. Upon any query regarding its interpretation or enforceability, the Spanish version shall be deemed official, and will prevail over the English version.

Este documento ha sido traducido al inglés para fines informativos. En caso de cualquier duda sobre su interpretación y aplicación, se entenderá que la versión en español es la versión oficial y prevalecerá sobre aquella escrita en inglés.