From Plans to People: Territorial Planning and Poverty in Colombia

Land-use policies shape the spatial allocation of infrastructure, services, and development and thus have direct implications for welfare. This paper examines the effects of Colombia's municipal territorial plan updates on poverty through the lens of the housing and services channel. Using municipality-level data from 2005 to 2023 and quasi-experimental treatment-effects methods, we find that in a matched design with extensive controls, plan updates reduce multidimensional poverty by roughly 1.6 percentage points. The gains are concentrated in smaller and medium-sized municipalities, especially those implementing broader plans (EOTs) and those with mid-range administrative capacity. Channel-specific estimates point to improvements in water access and housing quality. Overall, the findings indicate that the welfare impacts of planning reforms are real but place dependent, highlighting the roles of local capacity and baseline service deficits in determining whether regulatory updates translate into observable improvements.