Juan C. Chaparro, Michael Smart, Juan Gonzola Zapata
For the past fifteen years, Colombia has been engaged in a grand experiment in decentralization. Since 1986, subnational government spending has increased dramatically, as the regions have assumed greater control of health and education programs and other local services, and an increasing fraction of national revenues have been earmarked for transfer to lower-level governments. This paper examines fiscal data for a large number of Colombian municipalities for the 1985-99 period. Our first goal is to describe the effects of the transfer system on horizontal balance among municipalities. By our estimates, the fiscal capacities of Colombian municipalities differ substantially, which is a major challenge to designing an effective system of decentralization. Our second goal is to draw some inferences from the data about how the current system of transfers has affected the level of local taxation and spending, and the pattern of spending across functional categories. Our data cover a period that straddles the major reform in the allocation of municipal transfers that resulted from Law 60 in 1993. This permits a more accurate assessment of the effects of transfers than has been possible in previous research.
Ernesto Rezk, Lucrecia Rodas, María Cecilia Gáname
ADMINISTRACION FISCAL, FINANZAS LOCALES, DESCENTRALIZACION GUBERNAMENTAL, GOBIERNO MUNICIPAL, TRIBUTACION, TAX ADMINISTRATION, LOCAL FINANCE, DECENTRALIZATION IN GOVERNMENT, MUNICIPAL GOVERNMENT, TAXATION
espanolEn ausencia de un margen significativo para la descentralizacion plena de los principales tributos en Venezuela, la consecucion de los beneficios esperados de la descentralizacion amerita discutir que tipo de diseno institucional deben tener sus mecanismos de financiamiento. En mi entender, el reto fundamental para los responsables de ese diseno consiste en incorporar en esos mecanismos los incentivos apropiados para que los distintos actores coordinen sus acciones y promuevan la participacion de la sociedad civil en la toma de decisiones colectivas. Esto exige desarrollar una cultura intergubernamental cooperativa. La viabilidad de una cultura intergubernamental cooperativa solo sera sostenible cuando se internalice la nocion de que los recursos generados por los tributos de administracion centralizada no pertenecen exclusivamente al gobierno nacional, sino que deben ser derramados en toda la extension del territorio venezolano, de acuerdo con una mezcla de criterios redistributivos, de eficiencia asignativa y respetando el desarrollo socioeconomico balanceado. Esto es mas probable si prevalece la perspectiva de que figuras como el situado, las asignaciones economicas especiales y el Fides representan mecanismos de coparticipacion en los ingresos fiscales del pais y no simples transferencias desde el gobieno central. Asi, al interpretar los mecanismos intergubernamentales de financiamiento como modalidades de coparticipacion sobre unos recursos fiscales generados en todo el territorio, las relaciones intergubernamentales se hacen mas horizontales, aun cuando se siga reconociendo al gobierno central como un primu inter pares. EnglishGiven the fact that there is not a significant margin for full decentralization of the main taxes in Venezuela, achieving the expected benefits of decentralization requires to discuss what kind of institutional design should have its financing mechanisms. In my view, the fundamental challenge for the policy-makers is to built-in these mechanisms with the appropriate incentives for different levels of government coordination and civil society participation in the process of collective decisions making. This requirement implies to develop an intergovernmental cooperative culture. The viability of an intergovernmental cooperative culture will be sustainable to the extent the venezuelan society internalize the notion that central administered taxes do not belong exclusively to the national government. On the contrary, these resources must be spread through the whole national territory, according to a blend of redistributive, assignative and economic equilibrium criteria. This is more likely if there is a prevalent perspective that policy instruments such as the situado, the special economic assignments and Fides represent revenue-sharing mechanisms, and not just transfers from the central government. In such a way, interpreting the ingovernmental financial mechanisms as co-sharing devises over the fiscal resources produced in the whole territory, the intergovernmental relations become more horizontal, although we recognize the central government as a primu inter pares.
The aim of this paper is to contribute to the financial behavioural analysis of Spanish municipalities since the start of the ambitious process of political and economic decentralization linked to the restoration of democracy at the end of the 1970s. Specifically, the author presents financial figures, reviews the characteristics of the local finance system and the evolution of that system through what has been a series of unfinished reforms, and concludes by suggesting some possible corrections to the imperfections, or loose ends, detected.
This paper is intended to analyze, in a comparative perspective, the financing mechanisms of urban local governments in two groups of countries. The first group refers to a sample of OECD countries. They are rather decentralized, and have institutional features which date back many years from now. The scope of responsibilities faced by these countries. The second group is constituted by a number of Latin American countries. They are, in general, less decentralized and have the characteristic of not having a well established institutional structure. This has experienced various changes over the recent years, one of them being a process of transferring responsibilities to local tiers of governments, a tendency which in general, has not been accompanied by an increasing capacity to get resources neither from the central government nor from the local financial market.
A major issue in Latin. America is the decentralization of public finances and the autonomy of local government. This article begins with a brief review of the ongoing decentralization debate. We then discuss key features of local government finance and autonomy among unitary and federal governments in Latin America. Against that backdrop, we focus on the Chilean case, which has been a widely celebrated success story in the economic development literature. We argue that despite major gains by municipal governments over the past two decades, financial decision making powers still rest with the national government. This creates financial complacency among local governments. To remedy this, we conclude with six proposals for promoting effective decentralization.