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Decentralised Provision of Quasi- Private Goods: The Case of Colombia

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  • Ana María Iregui

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Abstract

This paper quantifies the welfare effects of decentralisation in Colombia, using a multiregional CGE model.We investigate to what extent will the Colombian Population be better off when goods such as health and education, are delivered locally as against centrally. A provision scheme based on the median voter is consided.According to the results, the provision of health and education by regional governments improves the welfare of the Colombian Population as a whole, since regional governments provide goods and services in a way that better caters to local preferences. More importantly,these welfare gains vary from 1.3% to 2.3% of GDP, a substantial magnitude especially when compared with the efficiency gains associated to the tax reforms of the early nineties.

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Paper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 203.

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Handle: RePEc:bdr:borrec:203

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Keywords: Decentralisation; applied CGE modelling; quasi-private goods.;

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  1. Besley, T. & Coate, S., 1989. "Public Provision Of Private Goods And The Redistribution Of Income," Papers 36, Princeton, Woodrow Wilson School - Discussion Paper.
  2. Munro, Alistair, 1991. "The optimal public provision of private goods," Journal of Public Economics, Elsevier, vol. 44(2), pages 239-261, March.
  3. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, October.
  4. Boadway, Robin W, 1974. "The Welfare Foundations of Cost-Benefit Analysis," Economic Journal, Royal Economic Society, vol. 84(336), pages 926-39, December.
  5. Lockwood, Ben, 1998. "Distributive Politics and the Benefits of Decentralisation," CSGR Working papers series 10/98, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
  6. John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204, December.
  7. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association, vol. 46(2), pages 207-27, June.
  8. Blomquist, S. & Christiansen, V., 1995. "Topping Up of Opting Out? The Optimal Design of Public Provision Schemes," Papers 1995-13, Uppsala - Working Paper Series.
  9. Lockwood, B., 2000. "The Assignment of Powers in Federal and Unitary States," The Warwick Economics Research Paper Series (TWERPS) 569, University of Warwick, Department of Economics.
  10. Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
  11. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
  12. St-Hilaire, France & Whalley, John, 1987. "A Microconsistent Data Set for Canada for Use in Regional General Equilibrium Policy Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 33(3), pages 327-43, September.
  13. Blomquist, Suren & Christiansen, Vidar, 1995. " Public Provision of Private Goods as a Redistributive Device in an Optimum Income Tax Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 547-67, December.
  14. Besley, Timothy, 1991. " Welfare Improving User Charges for Publicly Provided Private Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 93(4), pages 495-510.
  15. Alessandro BALESTRINO, 1995. "Public Provision of Private Goods and User Charges," Discussion Papers (REL - Recherches Economiques de Louvain) 1995043, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  16. Thum, Claudio & Thum, Marcel, 2001. " Repeated Interaction and the Public Provision of Private Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 625-43, December.
  17. Boadway, Robin & Roberts, Sandra & Shah, Anwar, 1994. "The reform of fiscal systems in developing and emerging market economies : a federalism perspective," Policy Research Working Paper Series 1259, The World Bank.
  18. Robert Inman, 1978. "Testing political economy’s ‘as if’ proposition: is the median income voter really decisive?," Public Choice, Springer, vol. 33(4), pages 45-65, December.
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Cited by:
  1. Eduardo Haddad & Jaime Bonet Moron & Geoffrey Hewings & Fernando Perobelli, 2008. "Spatial Aspects of Trade Liberalization in Colombia:A General Equilibrium Approach," BORRADORES DE ECONOMIA 004690, BANCO DE LA REPÚBLICA.
  2. Jesús Otero & Luis Fernando Gamboa & Andrés García-Suaza, 2011. "An analysis of the relationship between wages in the public and private sector in colombia: a panel data approach," DOCUMENTOS DE TRABAJO 008738, UNIVERSIDAD DEL ROSARIO.
  3. Jaime Bonet & Eduardo A. Haddad & Geoffrey J.D. Hewings & Fernando S. Perobelli, 2008. "Efectos regionales de una mayor liberación comercial en Colombia: Una estimación con el Modelo CEER," DOCUMENTOS DE TRABAJO SOBRE ECONOMÍA REGIONAL 005004, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL.

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