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Strategic fiscal interactions among local Governments in Colombia

Author

Listed:
  • Andres Felipe Muñoz

    (Inter-American Development Bank)

Abstract

Using spatial panel data from most municipalities in Colombia for the period 2000-09, this paper pro-vides empirical evidence of the existence of strategic fiscal interactions in property and business taxation. However, there is little evidence of cut-throat tax competition that leads to a «race to the bottom.» Also, this paper shows that differences in property tax rates affect local election results and the popularity of the main political parties in the local councils, signaling the presence of yardstick competition in this source. The results suggest that country does not seem to require policy measures aimed at attenuating municipal tax competition.

Suggested Citation

  • Andres Felipe Muñoz, 2016. "Strategic fiscal interactions among local Governments in Colombia," Hacienda Pública Española / Review of Public Economics, IEF, vol. 219(4), pages 161-188, December.
    • Handle: RePEc:hpe:journl:y:2016:v:219:i:4:p:161-188
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    References listed on IDEAS

    as
    1. Ana María Iregui B & Ligia Melo-Becerra & Jorge Ramos-Forero, 2004. "El impuesto predial en Colombia: evolución reciente, comportamiento de las tarifas y potencial de recaudo," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, December.
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    More about this item

    Keywords

    Decentralization; strategic fiscal interaction; tax competition; yardstick;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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