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The Common Municipal Fund: What is the role in the convergence of local incomes?

Author

Listed:
  • Yasna Cortés Garriga

    (IDEAR - Master in Regional Sciences - Department of Economics, Universidad Católica del Norte - Chile)

  • Dusan Paredes Araya

    (IDEAR - Master in Regional Sciences - Department of Economics, Universidad Católica del Norte - Chile)

Abstract

This paper analyzes the role of FCM in the convergence process of the income governments with a panel data of 345 municipalities for the period between 2001 and 2011. Using quasi-experiments and dynamic equations demonstrated that the FCM doesn’t have a significant effect in the increase of the convergence speed, evidencing the ineffective of this territorial policy in the reduction of disparities in long term. The weak develop of the decentralization and the low incentives of the municipalities to obtain own resources, promotes the emergence of strategic behaviors that distort the redistributive effect of the FCM in municipalities, decreasing its impact in the reduction of territorial disparities in Chile.

Suggested Citation

  • Yasna Cortés Garriga & Dusan Paredes Araya, 2013. "The Common Municipal Fund: What is the role in the convergence of local incomes?," Documentos de Trabajo en Economia y Ciencia Regional 45, Universidad Catolica del Norte, Chile, Department of Economics, revised Apr 2013.
    • Handle: RePEc:cat:dtecon:dt201314
    as

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    File URL: https://sites.google.com/a/ucn.cl/wpeconomia/archivos/WP2013-14.pdf
    File Function: First version, 2013
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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