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

Author Info

Listed author(s):
  • 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.

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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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Paper provided by Universidad Catolica del Norte, Chile, Department of Economics in its series Documentos de Trabajo en Economia y Ciencia Regional with number 45.

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Length: 35 pages
Date of creation: Apr 2013
Date of revision: Apr 2013
Handle: RePEc:cat:dtecon:dt201314
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Keywords: Descentralización; convergencia; disparidades regionales; panel de datos.;

Find related papers by 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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  1. Cristian F Sepulveda & Jorge Martinez-Vazquez, 2011. "The Consequences of Fiscal Decentralization on Poverty and Income Equality," Environment and Planning C, , vol. 29(2), pages 321-343, April.
  2. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
  3. Vassilis Tselios & Andrés Rodríguez-Pose & Andy Pike & John Tomaney & Gianpiero Torrisi, 2012. "Income inequality, decentralisation, and regional development in Western Europe," Environment and Planning A, Pion Ltd, London, vol. 44(6), pages 1278-1301, June.
  4. Damiaan Persyn & Koen Algoed, 2009. "Interregional redistribution, growth and convergence," Working Papers VIVES Research Centre for Regional Economics 4, KU Leuven, Faculty of Economics and Business, VIVES Research Centre for Regional Economics.
  5. Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
  6. Andrés Rodríguez-Pose & Roberto Ezcurra, 2010. "Does decentralization matter for regional disparities? A cross-country analysis," Journal of Economic Geography, Oxford University Press, vol. 10(5), pages 619-644, September.
  7. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
  8. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
  9. Ernesto Crivelli, 2012. "Local governments’ fiscal balance and privatization in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(4), pages 677-703, October.
  10. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
  11. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
  12. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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