Decentralization and bailouts in Colombia
Descentralization has meny benefits, but it can also weaken fiscal discipline, specifically, expectations on the possibility of a bailout by central government create incentives for fiscal misbehavior, fiscal discipline does not pay because it carries a smaller expected bailout. In Colombia the subs...
Autores Principales: | , , |
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Publicado: |
2015
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Materias: | |
Acceso en línea: | http://hdl.handle.net/11445/827 |
Sumario: | Descentralization has meny benefits, but it can also weaken fiscal discipline, specifically, expectations on the possibility of a bailout by central government create incentives for fiscal misbehavior, fiscal discipline does not pay because it carries a smaller expected bailout. In Colombia the substantial transfer form the central government to the sub-regions created structural expenditure pressures and irresponsible behavior in terms of debt (mainly ñoans from banks), brought the departments into default and forced the central government to bail them out. |
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