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Fiscal decentralization and economic growth in Colombia: evidence from regional-level panel data

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  • Lozano, Ignacio
  • Julio, Juan Manuel

Abstract

This paper provides evidence for the positive effects of fiscal decentralization on regional economic growth in Colombia since the enactment of the Political Constitution of 1991. The empirical strategy involved choosing a suitable estimator for the panel data approach, the augmented mean group (AMG) estimator, that enabled unobserved determinants suggested by the literature to be added to traditional long-term explanatory factors. The strategy was supplemented with exercises that provided support for the results from (i) cross-sectional models for different periods and various control variables; (ii) a test of the hypothesis of complementarity between public goods provided by different jurisdictions (spillover effects), and (iii) an assessment of unconditional convergence in regional income differences.

Suggested Citation

  • Lozano, Ignacio & Julio, Juan Manuel, 2016. "Fiscal decentralization and economic growth in Colombia: evidence from regional-level panel data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    • Handle: RePEc:ecr:col070:40789
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    1. Ligia Melo B., 2005. "Impacto de la Descentralización Fiscal sobre la Educación Pública Colombiana," Borradores de Economia 350, Banco de la Republica de Colombia.
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    Cited by:

    1. Septimiu-Rares SZABO, 2017. "The Empirical Relationship Between Fiscal Decentralization And Economic Growth: A Review Of Variables, Models And Results," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 9(2), pages 47-66, June.
    2. Göcen, Serdar & Bayhanay, Alp & Göktaş, Nilüfer, 2017. "Fiscal Decentralization and Economic Growth: Theory and Application," MPRA Paper 84523, University Library of Munich, Germany.
    3. Eduardo A. Haddad & Luis A. Galvis & Inácio F. Araújo-Junior & Vinicius A.Vale, 2018. "Impact Assessment of Scenarios of Interregional Transfers in Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 16767, Banco de la República, Economía Regional.
    4. Jorge Barrientos-Marín & Juan Felipe Quintero-Vanegas & Manuela Mendoza-Jaramillo, 2020. "On the determinants of fiscal sustainability of municipalities in Colombia. The case of Antioquia, 2008-2017," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 92, pages 173-200, Enero-Jun.

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