Intergovernmental transfers and fiscal autonomy in colombian municipalities
Abstract
This paper analyzes the impact of intergovernmental transfers and own-source revenues on public spending in Colombian municipalities during the 2000-2017 period, using econometric panel data models (pooled, random effects, and fixed effects). The results indicate that own-source revenues per capita have a greater impact on municipal spending than unconditional transfers, highlighting the importance of strengthening municipal fiscal autonomy. Additionally, it is evident that reductions in unconditional transfers and royalties per capita drive local governments to seek alternative funding sources, such as increased local revenue collection, new taxes, or borrowing, to maintain their spending levels. However, the heavy reliance on conditional transfers limits the flexibility of municipalities, particularly those in the sixth category.
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References
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