OECD Territorial Reviews: Colombia 2014

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Regional development policy is a priority of Colombia’s government. The country has experienced sustained economic growth over the past decade; yet several territories still lack development opportunities. To promote growth in all regions the government has engaged in a series of reforms. For instance, it started allocating royalty payments generated by hydrocarbon resources to all departments and most municipalities, including those that are not endowed with natural resources. The reform also promotes better multilevel governance and represents a good policy practice for countries seeking to link natural resource development with regional development.

To support the current efforts of Colombia’s government, this report illustrates policy recommendations to help national authorities adopting a territorial approach to inclusive economic development. In particular, the OECD recommends to: a) improve the quantity and quality of regional statistics and formulate urban and rural taxonomies that help tailor policies to places; b) involve territorial constituencies in the design of policy interventions and allocate to them more implementation responsibilities within the framework of the National Development Plan; c) promote coordination among subnational bodies to scale up investment in territories to avoid that public investment – and royalty payments – gets dispersed in a myriad of small-scale projects.


Sub-national public finance in Colombia

This chapter assesses public finances in Colombia from a regional perspective. In particular, it looks at how fiscal limitations on sub-national governments may undermine the feasibility of moving towards a territorial approach to economic development. The first section gives an overview of fiscal decentralisation in Colombia, and highlights the impact direct transfers from the central government have on the propensity of the sub-central governments to raise their own revenues (fiscal inertia). The second section discusses budget balancing and debt at the sub-national level. It also focuses on public investment and fiscal discipline at the territorial level. Finally, the third and final section contains a set of recommendations to improve the efficiency of sub-national public finances and establish a better framework to promote public investments.


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