IDEAS home Printed from https://ideas.repec.org/p/col/000102/015404.html
   My bibliography  Save this paper

The Territorial Fiscal Gap in Colombia

Author

Listed:
  • Jaime Bonet-Morón
  • Jhorland Ayala-García

Abstract

This paper presents an estimation of expenditure needs and fiscal capacity of Colombia’s municipalities and departments in 2014. We use standard per capita norms to estimate the spending needs and data envelopment analysis for the local fiscal capacity. The results show that: (i) there are high horizontal fiscal disparities in Colombia, with greater incidence in municipalities than in departments; (ii) these disparities favor more developed territories; and (iii) there is evidence of a centerperiphery pattern in the horizontal fiscal disparities, causing central regions of the country to have a lower imbalance between expenditure needs and fiscal capacity. An equalization transfers system is an option for public policy to eliminate these disparities.

Suggested Citation

  • Jaime Bonet-Morón & Jhorland Ayala-García, 2017. "The Territorial Fiscal Gap in Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 15404, Banco de la República, Economía Regional.
  • Handle: RePEc:col:000102:015404
    DOI: 10.32468/dtseru.251
    as

    Download full text from publisher

    File URL: https://doi.org/10.32468/dtseru.251
    Download Restriction: no

    File URL: https://libkey.io/10.32468/dtseru.251?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), 2011. "Handbook on Data Envelopment Analysis," International Series in Operations Research and Management Science, Springer, number 978-1-4419-6151-8, December.
    2. Kenneth H. Norrie & M. B. Percy & L. S. Wilson, 1982. "Financing Confederation: Principles and Practices of Equalization," Canadian Public Policy, University of Toronto Press, vol. 8(3), pages 290-293, Summer.
    3. Peter-J Jost, 2011. "The Economics of Organization and Coordination," Books, Edward Elgar Publishing, number 13332.
    4. Bonet-Morón, Jaime Alfredo & Meisel-Roca, Adolfo, 2001. "La convergencia regional en Colombia : una visión de largo plazo, 1926-1995," Chapters, in: Meisel-Roca, Adolfo (ed.), Regiones, ciudades y crecimiento económico en Colombia, chapter 1, pages 11-56, Banco de la Republica de Colombia.
    5. N/A, 2011. "AT A GLANCE . . . The world economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 215(1), pages 2-2, January.
    6. Galvis-Aponte, Luis Armando & Meisel-Roca, Adolfo, 2011. "Persistencia de las desigualdades regionales en Colombia : un análisis espacial," Chapters, in: Bonilla-Mejía, Leonardo (ed.), Dimensión regional de las desigualdades en Colombia, chapter 1, pages 3-32, Banco de la Republica de Colombia.
    7. Oecd, 2011. "Selecting Economic Operators," SIGMA Public Procurement Briefs 7, OECD Publishing.
    8. Jaime Bonet, 2006. "Fiscal decentralization and regional income disparities: evidence from the Colombian experience," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(3), pages 661-676, August.
    9. Jameson Boex & Jorge Martinez-Vazquez, 2007. "Designing Intergovernmental Equalization Transfers with Imperfect Data: Concepts, Practices, and Lessons," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 291-343, Springer.
    10. Robin Boadway & Anwar Shah, 2007. "Intergovernmental Fiscal Transfers : Principles and Practice," World Bank Publications - Books, The World Bank Group, number 7171, December.
    11. James Alm & Denvil Duncan, 2014. "Estimating Tax Agency Efficiency," Public Budgeting & Finance, Wiley Blackwell, vol. 34(3), pages 92-110, September.
    12. Krüger, Jens J., 2012. "A Monte Carlo study of old and new frontier methods for efficiency measurement," European Journal of Operational Research, Elsevier, vol. 222(1), pages 137-148.
    13. Yong-bae Ji & Choonjoo Lee, 2010. "Data envelopment analysis," Stata Journal, StataCorp LP, vol. 10(2), pages 267-280, June.
    14. Gómez Sabaini, Juan Carlos & Rossignolo, Darío, 2015. "La tributación sobre las altas rentas en América Latina," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 39665, March.
    15. Musgrave, Richard A., 1990. "Horizontal Equity, Once More," National Tax Journal, National Tax Association, vol. 43(2), pages 113-22, June.
    16. N/A, 2011. "Multipolarity: The New Global Economy," Foreign Trade Review, , vol. 46(3), pages 89-106, October.
    17. N/A, 2011. "The UK economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 217(1), pages 3-3, July.
    18. B. Dahlby & L. S. Wilson, 1994. "Fiscal Capacity, Tax Effort, and Optimal Equalization Grants," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 657-672, August.
    19. Jaime Bonet-Morón & Jhorland Ayala-García, 2015. "Transferencias intergubernamentales y disparidades fiscales horizontales en Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 14181, Banco de la República, Economía Regional.
    20. Musgrave, Richard A., 1990. "Horizontal Equity, Once More," National Tax Journal, National Tax Association;National Tax Journal, vol. 43(2), pages 113-122, June.
    21. Ray,Subhash C., 2012. "Data Envelopment Analysis," Cambridge Books, Cambridge University Press, number 9781107405264, October.
    22. Oecd, 2011. "Economic Issues in Public Procurement," SIGMA Public Procurement Briefs 2, OECD Publishing.
    23. Bert Hofman & Susana Cordeiro Guerra, 2007. "Ensuring Inter-Regional Equity and Poverty Reduction," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 31-59, Springer.
    24. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    25. Jorge Martinez-Vazquez & Bob Searle, 2007. "Challenges in the Design of Fiscal Equalization and Intergovernmental Transfers," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 3-10, Springer.
    26. Douglas A. L. Auld & Lorraine Eden, 1987. "A Comparative Evaluation of Provincial-Local Equalization," Canadian Public Policy, University of Toronto Press, vol. 13(4), pages 515-528, December.
    27. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    28. ., 2011. "Kaleckian Macroeconomics: An Outline," Chapters, in: Unemployment, Recession and Effective Demand, chapter 7, Edward Elgar Publishing.
    29. N/A, 2011. "AT A GLANCE . . . The world economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 217(1), pages 2-2, July.
    30. Le Grand, Julian, 1975. "Fiscal Equity and Central Government Grants to Local Authorities," Economic Journal, Royal Economic Society, vol. 85(339), pages 531-547, September.
    31. N/A, 2011. "The UK economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 215(1), pages 3-3, January.
    32. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Data Envelopment Analysis," Springer Books, Springer, edition 0, number 978-0-387-45283-8, January.
    33. William W. Cooper & Lawrence M. Seiford & Joe Zhu, 2011. "Data Envelopment Analysis: History, Models, and Interpretations," International Series in Operations Research & Management Science, in: William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), Handbook on Data Envelopment Analysis, chapter 0, pages 1-39, Springer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jhorland Ayala-Garcia & Sandy Dall'Erba & William C. Ridley, 2021. "Externalities of extreme natural disasters on local tax capacity," Documentos de trabajo sobre Economía Regional y Urbana 299, Banco de la Republica de Colombia.
    2. Adolfo Meisel-Roca & Diani Ricciulli-Marín, 2018. "La pobreza en Santa Marta: Los estragos del bien," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 12(2), pages 43-105, December.
    3. Eduardo A. Haddad & Luis A. Galvis & Inácio F. Araújo-Junior & Vinicius A.Vale, 2018. "Impact Assessment of Scenarios of Interregional Transfers in Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 16767, Banco de la República, Economía Regional.
    4. Jaime Bonet-Morón & Yuri Reina-Aranza & Diana Ricciulli-Marin, 2018. "Movimientos sociales y desarrollo económico en Chocó y Buenaventura," Documentos de trabajo sobre Economía Regional y Urbana 270, Banco de la Republica de Colombia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jaime Bonet-Morón & Jhorland Ayala-García, 2016. "La brecha fiscal territorial en Colombia," Documentos de trabajo sobre Economía Regional y Urbana 235, Banco de la Republica de Colombia.
    2. Suyanto, & Salim, Ruhul & Bloch, Harry, 2014. "Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing," Journal of Asian Economics, Elsevier, vol. 33(C), pages 16-29.
    3. Cattaneo, Mattia & Malighetti, Paolo & Paleari, Stefano & Redondi, Renato, 2016. "The role of the air transport service in interregional long-distance students’ mobility in Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 93(C), pages 66-82.
    4. Jhorland Ayala-García & Jaime Bonet-Morón, 2015. "Transferencias intergubernamentales y disparidades fiscales horizontales en Colombia," Documentos de trabajo sobre Economía Regional y Urbana 231, Banco de la Republica de Colombia.
    5. Anastasiou Athanasios & Kalligosfyris Charalampos & Kalamara Eleni, 2022. "Assessing the effectiveness of tax administration in macroeconomic stability: evidence from 26 European Countries," Economic Change and Restructuring, Springer, vol. 55(4), pages 2237-2261, November.
    6. Matthias Klumpp & Dominic Loske, 2021. "Sustainability and Resilience Revisited: Impact of Information Technology Disruptions on Empirical Retail Logistics Efficiency," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    7. Duk Hee Lee & Il Won Seo & Ho Chull Choe & Hee Dae Kim, 2012. "Collaboration network patterns and research performance: the case of Korean public research institutions," Scientometrics, Springer;Akadémiai Kiadó, vol. 91(3), pages 925-942, June.
    8. Petridis, Konstantinos & Malesios, Chrisovalantis & Arabatzis, Garyfallos & Thanassoulis, Emmanuel, 2013. "Efficiency analysis of forestry journals: Suggestions for improving journals’ quality," Journal of Informetrics, Elsevier, vol. 7(2), pages 505-521.
    9. Fazlollahi, Ariyan & Franke, Ulrik, 2018. "Measuring the impact of enterprise integration on firm performance using data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 200(C), pages 119-129.
    10. Valentin Zelenyuk, 2019. "Data Envelopment Analysis and Business Analytics: The Big Data Challenges and Some Solutions," CEPA Working Papers Series WP072019, School of Economics, University of Queensland, Australia.
    11. Rafael Benítez & Vicente Coll-Serrano & Vicente J. Bolós, 2021. "deaR-Shiny: An Interactive Web App for Data Envelopment Analysis," Sustainability, MDPI, vol. 13(12), pages 1-19, June.
    12. Walter Briec & Kristiaan Kerstens & Ignace Van de Woestyne, 2013. "Nonparametric cost and revenue functions under constant economies of scale: An enumeration approach for the single output or input case," Working Papers 2013-ECO-22, IESEG School of Management.
    13. Mª Isabel Ortega-Díaz & Ricardo Ocaña-Riola & Carmen Pérez-Romero & José Jesús Martín-Martín, 2020. "Multilevel Analysis of the Relationship between Ownership Structure and Technical Efficiency Frontier in the Spanish National Health System Hospitals," IJERPH, MDPI, vol. 17(16), pages 1-19, August.
    14. Chih-Cheng Chen, 2015. "Assessing the Activeness of Online Economic Activity of Taiwan’s Internet Users: An Application of the Super-Efficiency Data Envelopment Analysis Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(2), pages 433-451, June.
    15. Kohl, Sebastian & Brunner, Jens O., 2020. "Benchmarking the benchmarks – Comparing the accuracy of Data Envelopment Analysis models in constant returns to scale settings," European Journal of Operational Research, Elsevier, vol. 285(3), pages 1042-1057.
    16. Pejman Peykani & Jafar Gheidar-Kheljani & Reza Farzipoor Saen & Emran Mohammadi, 2022. "Generalized robust window data envelopment analysis approach for dynamic performance measurement under uncertain panel data," Operational Research, Springer, vol. 22(5), pages 5529-5567, November.
    17. Feng Li & Qingyuan Zhu & Jun Zhuang, 2018. "Analysis of fire protection efficiency in the United States: a two-stage DEA-based approach," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 40(1), pages 23-68, January.
    18. Margareta Gardijan & Zrinka Lukač, 2018. "Measuring the relative efficiency of the food and drink industry in the chosen EU countries using the data envelopment analysis with missing data," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 26(3), pages 695-713, September.
    19. Mehdiloozad, Mahmood & Zhu, Joe & Sahoo, Biresh K., 2018. "Identification of congestion in data envelopment analysis under the occurrence of multiple projections: A reliable method capable of dealing with negative data," European Journal of Operational Research, Elsevier, vol. 265(2), pages 644-654.
    20. Subhash C. Ray & Lei Chen, 2015. "Data Envelopment Analysis for Performance Evaluation: A Child’s Guide," Springer Books, in: Subhash C. Ray & Subal C. Kumbhakar & Pami Dua (ed.), Benchmarking for Performance Evaluation, edition 127, chapter 0, pages 75-116, Springer.

    More about this item

    Keywords

    horizontal fiscal disparities; fiscal capacity; fiscal needs; dataenvelopment analysis;
    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
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000102:015404. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Banco De La República - Economía Regional (email available below). General contact details of provider: https://edirc.repec.org/data/cbcgvco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.