Data Science: panel data analysis to determine the effect of intergovernmental transfers on Colombian territorial tax collection.

The fiscal federalism literature studies the decentralization and the budgetary relationship among governmental levels. The first generation seeks to explain the benefits of transfers and decentralization; on the other hand, the second generation seeks an optimal design considering the presence of i...

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Autores:
Torres Ortega, José Alberto
Ortega De La Rosa, Jorge Mario
Ilias Isaza, Yeimmy
Tipo de recurso:
Article of investigation
Fecha de publicación:
2022
Institución:
Corporación Universidad de la Costa
Repositorio:
REDICUC - Repositorio CUC
Idioma:
eng
OAI Identifier:
oai:repositorio.cuc.edu.co:11323/10818
Acceso en línea:
https://hdl.handle.net/11323/10818
https://repositorio.cuc.edu.co/
Palabra clave:
Tax Revenue
Panel Data
Intergovernmental transfers
Fiscal federalism
Rights
openAccess
License
Atribución-NoComercial-SinDerivadas 4.0 Internacional (CC BY-NC-ND 4.0)
Description
Summary:The fiscal federalism literature studies the decentralization and the budgetary relationship among governmental levels. The first generation seeks to explain the benefits of transfers and decentralization; on the other hand, the second generation seeks an optimal design considering the presence of incentive schemes that depends on different factors and the territorial context. These elements must be analyzed when the goal is an optimal fiscal design of the government structure. This research contributes to the debate measuring the intergovernmental transfer's effect on Colombian municipalities' tax collection, the period between 2000 and 2017 is analyzed. For this purpose, we use logarithmic panel data with the Prais-Winsten model and first-order autocorrelation correction. The results suggest that transfers have a positive impact above municipal collections, in contrast with fiscal laziness arguments. This phenomenon occurs because transfer increases lead to social pressure to maintain public goods; therefore, the local government seeks to enhance local revenue to satisfy the social demand. Also, the transfers impulse the regional economic growth generating a higher tax base.