Fiscal Decentralization in Colombia: A Work (Still) in Progress

The degree of fiscal decentralization in Colombia is impressive. In some respects, however, Colombian decentralization has hardly changed since the process first began over 40 years ago. This review of the experience of the last few decades and the challenges now facing the country shows that there have been some clear successes as a result of decentralization. However, many problems have also arisen as a result of both perverse incentives built into the system and the failure to build up central and especially local capacity to manage a more decentralized system. Unless these critical problems are resolved, fiscal decentralization in Colombia will remain a work in progress with, at best, only partially successful outcomes whether in terms of providing public services to the country’s growing population more effectively, efficiently, and equitably or in terms of improving subnational governance in general.