Abstract

http://ssrn.com/abstract=1091098
 
 

References (33)



 
 

Citations (1)



 


 



Decentralization's Effects on Public Investment: Evidence and Policy Lessons from Bolivia and Colombia


Jean-Paul Faguet


London School of Economics


Journal of Development Studies, Forthcoming

Abstract:     
This paper examines decentralisation in Bolivia and Colombia to explore its effects on the uses and spatial distribution of public investment, as well as government responsiveness to local needs. In both countries, investment shifted from infrastructure to social services and human capital formation. Resources were rebalanced in favour of poorer districts. In Bolivia, decentralisation made government more responsive by re-directing public investment to areas of greatest need. In Colombia, municipalities increased investment significantly while running costs fell. Six important lessons emerge from the comparison. For decentralisation to work well, (i) local democracy must be transparent, fair and competitive; (ii) local governments must face hard budget constraints; (iii) central government must be scaled back; (iv) significant tax-raising powers must be devolved; and (v) decentralization is composed of distinct, separable components, the sequencing of which is important. Lastly, (vi) what decentralisation achieves, and whether it is advisable, hinge on how central government behaved pre-reform.

Number of Pages in PDF File: 37

Keywords: decentralisation, public investment, Latin America, Bolivia, Colombia, local government

JEL Classification: D73, H41, H42, H72, H77

Accepted Paper Series





Download This Paper

Date posted: February 12, 2008  

Suggested Citation

Faguet, Jean-Paul, Decentralization's Effects on Public Investment: Evidence and Policy Lessons from Bolivia and Colombia. Available at SSRN: http://ssrn.com/abstract=1091098

Contact Information

Jean-Paul Faguet (Contact Author)
London School of Economics ( email )
Houghton Street
London WC2A 2AE
United Kingdom
+44 207 955 6435 (Phone)
+44 207 955 6844 (Fax)
HOME PAGE: http://www.lse.ac.uk/Depts/destin/faguetjp.html
Feedback to SSRN


Paper statistics
Abstract Views: 463
Downloads: 113
Download Rank: 146,293
References:  33
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.485 seconds