Institutional Development in Main Colombian Cities: What Is Its Relation to Subjective Poverty?

Abstract

Since a peace treaty in 2016, Colombia has faced a significant challenge to reduce poverty and strengthen its institutions. A few studies have analyzed the relationship between institutions and subjective poverty, but none has demonstrated this influence in the Colombian context at a municipal level. This article estimated a logit regression including a cluster effect to evidence the influence of municipal institutions over perceptions of poverty by the inhabitants of twelve main cities in Colombia in 2016. Findings include that having a better rule of law and fiscal performance, reducing political fragmentation to have better governance, guaranteeing property rights, fostering the benefits of metropolitan areas, and improving citizen participation reduce the probability of feeling poor.