Decentralization, structural change and regional disparities in Colombia

This dissertation presents three studies exploring the relationships between the decentralization process, regional structural changes and regional disparities in Colombia. The first essay analyzes the regional and interregional structure and the structural changes in Colombia. Previous findings were evaluated by taking advantage of a newly constructed interregional input-output model to measure the interactions within and between the Colombian regions. The results suggest that key sectors have moved from primary and secondary sectors to tertiary sectors. However, it can be argued that the regional economies do not have exactly the same linkage structures. These differences are the result of discrepancies in the dominant sectors in each subnational economy. The interregional linkages reveal a country with self-sufficient sectors in most of the regions, which supports the idea of a country with relatively poor interregional dependences.; The second study introduces new empirical evidence about the relationship between fiscal decentralization and regional income disparities. First, a panel data approach is introduced in order to explore the dynamics of adjustment involved in a fiscal decentralization policy. Secondly, the analysis is based on a country experience rather than a cross-country analysis, so the effects of fiscal decentralization are estimated more objectively than previous research that exhibits little cultural, historical, and institutional variation. Finally, other limitations observed in previous work, such as the absence of spatial dependence and sensitivity of the conclusions to the measures of fiscal decentralization used, are addressed in this paper.; The third essay analyzes the changes in inequality with respect to Colombian educational facilities between 1968 and 2000 in terms of interregional and intraregional disparities. The results indicate that spatial spillover effects increase the intra and inter regional inequalities in educational infrastructure. While decentralization is associated with higher infrastructure growth rates, the reduction in inequality seems to be clearer under centralization. Since a decentralized system and social unrest conditions still persist in Colombia, the adoption of a redistributed component as well as the incorporation of a spatial dimension may be advanced as important considerations for to the modification of policies designed to reduce educational facilities disparities.