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Decentralization, Fiscal Effort and Social Progress in Colombia at the Municipal Level, 1994-2009: Why Does National Politics Matter?

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Name of the Asset | Decentralization, Fiscal Effort and Social Progress in Colombia at the Municipal Level, 1994-2009: Why Does National Politics Matter?
Type of Asset | Working Paper
Date | July 2013


This paper is an attempt to study the interaction between a range of governance structures and variables with policy outcomes in two sectors: education and water. The undertaking of decentralization policies has been advised and encouraged as a way to bring governments and public goods delivery closer to the people and thereby improve accountability. The present paper explores the effect of electoral competition — both local and national — at the local level, on the incentives to build fiscal capacity and provide quality public goods.

The research hypothesis is that political competition at both these levels provides a boost to municipal decentralization as measured through the local fiscal capacity. The findings of the study support this hypothesis.

Using a rich panel municipal dataset from 1994 till 2009, researchers show that on comparing the differences across education and the water and sewerage sectors, the power of local fiscal effort (i.e. updating the cadaster and collecting local taxes) appears to be the driving force behind better policy outcomes than any other resource commonly made available to the municipalities, such as national transfers or royalties. National political competition at the local level matters insofar as it provides mayors with the right incentives to build their own fiscal capacity.  


  • Mónica Pachón
  • Fabio Sánchez Torres

Country and/or Region | Colombia
Name of the Program | GDN’s Global Research Project 'Varieties of Governance: Effective Public Service Delivery'
Funder(s) | The Australian Agency for International Development (AusAID), Department for International Development (DFID), UK, the French Ministry of Foreign and European Affairs, Inter‐American Development Bank (IDB), International Development Research Centre (IDRC), Open Society Institute (OSI), The Partnership for African Social and Governance Research (PASGR) and the World Bank

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