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Carrying the Weight of Autonomy? Growth and Spatial Inequality Among Municipalities in Colombia

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dc.contributor.advisorMesa Guerra, Carlos Antonio
dc.contributor.advisorCortés Cortés, Darwin
dc.creatorHolguín Isaza, Carlos Felipe
dc.creator.degreeMagíster en economía de las políticas públicas
dc.creator.degreeLevelMaestría
dc.date.accessioned2025-02-12T18:31:44Z
dc.date.available2025-02-12T18:31:44Z
dc.date.created2024-12-13
dc.date.embargoEndinfo:eu-repo/date/embargoEnd/2027-02-13
dc.descriptionThis study explores the impact of fiscal decentralization on income convergence across Colombian municipalities. Using the theory of fiscal federalism and the endogenous growth model, I assess whether increased fiscal autonomy has contributed to reducing income disparities at the municipal level. To address the challenge of measuring local economic activity, I apply an Artificial Neural Network trained on Night-time Lights data to estimate municipal per capita Value-Added from 1993 to 2018. A two-stage least squares (2SLS) approach with instrumental variables is used to account for potential endogeneity in the explanatory variables. The results show that fiscal decentralization, particularly revenue-based measures, significantly enhances income convergence, with annual rates ranging from 2.7% to 4.2%, while a 1% increase in decentralization is associated with a 0.16% to 0.28% increase in per capita VA growth. On the other hand, the impact of expenditure-based decentralization, mainly higher autonomy on expenditure decisions, on growth and convergence is inconclusive. The effect is more pronounced in lower-income municipalities, where investments in public capital ought to be more productive. This research contributes to the literature by providing new insights into the role of fiscal decentralization in reducing regional inequality, particularly at the municipal level.
dc.description.abstractThis study explores the impact of fiscal decentralization on income convergence across Colombian municipalities. Using the theory of fiscal federalism and the endogenous growth model, I assess whether increased fiscal autonomy has contributed to reducing income disparities at the municipal level. To address the challenge of measuring local economic activity, I apply an Artificial Neural Network trained on Night-time Lights data to estimate municipal per capita Value-Added from 1993 to 2018. A two-stage least squares (2SLS) approach with instrumental variables is used to account for potential endogeneity in the explanatory variables. The results show that fiscal decentralization, particularly revenue-based measures, significantly enhances income convergence, with annual rates ranging from 2.7% to 4.2%, while a 1% increase in decentralization is associated with a 0.16% to 0.28% increase in per capita VA growth. On the other hand, the impact of expenditure-based decentralization, mainly higher autonomy on expenditure decisions, on growth and convergence is inconclusive. The effect is more pronounced in lower-income municipalities, where investments in public capital ought to be more productive. This research contributes to the literature by providing new insights into the role of fiscal decentralization in reducing regional inequality, particularly at the municipal level.
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dc.identifier.doihttps://doi.org/10.48713/10336_44974
dc.identifier.urihttps://repository.urosario.edu.co/handle/10336/44974
dc.language.isoeng
dc.publisherUniversidad del Rosario
dc.publisher.departmentFacultad de Economía
dc.publisher.programMaestría en Economía de las Políticas Públicasspa
dc.rightsAttribution-NonCommercial-ShareAlike 4.0 International*
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dc.source.instnameinstname:Universidad del Rosario
dc.source.reponamereponame:Repositorio Institucional EdocUR
dc.subjectDescentralización fiscal
dc.subjectConvergencia del ingreso
dc.subjectMunicipios colombianos
dc.subjectFederalismo fiscal
dc.subjectModelo de crecimiento endógeno
dc.subjectAutonomía fiscal
dc.subjectDesigualdades de ingreso
dc.subjectActividad económica local
dc.subjectRed Neuronal Artificial (RNA)
dc.subjectDatos de luces nocturnas
dc.subjectValor Agregado (VA) per cápita municipal
dc.subjectMínimos cuadrados en dos etapas (MC2E)
dc.subjectVariables instrumentales
dc.subjectMedidas basadas en ingresos
dc.subjectDescentralización basada en el gasto
dc.subjectInversiones en capital público
dc.subjectDesigualdad regional
dc.subject.keywordFiscal decentralization
dc.subject.keywordIncome convergence
dc.subject.keywordColombian municipalities
dc.subject.keywordFiscal federalism
dc.subject.keywordEndogenous growth model
dc.subject.keywordFiscal autonomy
dc.subject.keywordIncome disparities
dc.subject.keywordLocal economic activity
dc.subject.keywordArtificial Neural Network (ANN)
dc.subject.keywordNight-time Lights data
dc.subject.keywordMunicipal per capita Value-Added (VA)
dc.subject.keywordTwo-stage least squares (2SLS)
dc.subject.keywordInstrumental variables
dc.subject.keywordRevenue-based measures
dc.subject.keywordExpenditure-based decentralization
dc.subject.keywordPublic capital investments
dc.subject.keywordRegional inequality
dc.titleCarrying the Weight of Autonomy? Growth and Spatial Inequality Among Municipalities in Colombia
dc.title.TranslatedTitle¿Cargar con el peso de la autonomía? Crecimiento y desigualdad espacial entre municipios de Colombia
dc.typemasterThesis
dc.type.hasVersioninfo:eu-repo/semantics/acceptedVersion
dc.type.spaTrabajo de grado
local.department.reportFacultad de Economía
local.regionesBogotá
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