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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 considered. 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 REPÚBLICA in its series BORRADORES DE ECONOMIA with number 002251.

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Length: 35
Date of creation: 31 Mar 2002
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Handle: RePEc:col:000094:002251

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Keywords: Decentralisation;

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  1. Lockwood, B., 1998. "Distributive Politics and the Benefits of Decentralization," The Warwick Economics Research Paper Series (TWERPS) 513, University of Warwick, Department of Economics.
  2. 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.
  3. Arrow, Kenneth J, 1971. "A Utilitarian Approach to the Concept of Equality in Public Expenditure," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 85(3), pages 409-15, August.
  4. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521894753.
  5. John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262231204, December.
  6. Blomquist, S. & Christiansen, V., 1995. "Topping Up of Opting Out? The Optimal Design of Public Provision Schemes," Papers, Uppsala - Working Paper Series 1995-13, Uppsala - Working Paper Series.
  7. 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).
  8. Besley, T. & Coate, S., 1989. "Public Provision Of Private Goods And The Redistribution Of Income," Papers, Princeton, Woodrow Wilson School - Discussion Paper 36, Princeton, Woodrow Wilson School - Discussion Paper.
  9. 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.
  10. 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.
  11. Besley, Timothy, 1991. " Welfare Improving User Charges for Publicly Provided Private Goods," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 93(4), pages 495-510.
  12. Robert Inman, 1978. "Testing political economy’s ‘as if’ proposition: is the median income voter really decisive?," Public Choice, Springer, Springer, vol. 33(4), pages 45-65, December.
  13. Munro, Alistair, 1991. "The optimal public provision of private goods," Journal of Public Economics, Elsevier, Elsevier, vol. 44(2), pages 239-261, March.
  14. Thum, Claudio & Thum, Marcel, 2001. " Repeated Interaction and the Public Provision of Private Goods," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 103(4), pages 625-43, December.
  15. 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, Wiley Blackwell, vol. 97(4), pages 547-67, December.
  16. Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics, Elsevier, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
  17. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
  18. Boadway, Robin W, 1974. "The Welfare Foundations of Cost-Benefit Analysis," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 84(336), pages 926-39, December.
  19. 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.
  20. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 104(1), pages 57-84, February.
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Cited by:
  1. 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, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL 005004, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL.
  2. 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.
  3. 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, UNIVERSIDAD DEL ROSARIO 008738, UNIVERSIDAD DEL ROSARIO.

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