More Than You Can Handle: Decentralization and Spending Ability of Peruvian Municipalities

Loayza, Norman; Rigolini, Jamele; Calvo-Gonzalez, Oscar

doi:10.1596/1813-9450-5763

Cited by 19 publications

(26 citation statements)

References 23 publications

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“…Once we introduce department dummies, we find that the Canon raises average per capita expenditure but has no significant impact on other socioeconomic outcomes. The limited impact of the Canon is consistent with the observed challenges districts are facing to manage large transfers from the central Government, which have been scaled up in the context of the 2002 decentralization process (Loayza, Rigolini and Calvo-Gonzalez, 2011). This apparent shortcoming calls for reforming the way in which producing regions should share the benefits from mining activity.…”

supporting

confidence: 69%

“…This nuanced impact may well be at the center of the current social discontent regarding mining activities in the country. Solving this discontent may require a broader discussion and overarching institutional reforms that reach to the current decentralization structure, of which mining revenues are only one component (Loayza, Rigolini and Calvo-Gonzalez, 2011). We leave this discussion to further research.…”

mentioning

confidence: 99%

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Poverty, Inequality, and the Local Natural Resource Curse

Loayza

Teran

Rigolini

2013

Policy Research Working Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. The extent to which local communities benefit from commodity booms has been subject to wide but inconclusive investigations. This paper draws from a new district-level database to investigate the local impact on socioeconomic outcomes of mining activity in Peru, which grew almost twentyfold in the last two decades. We find evidence that producing districts have better average living standards than otherwise similar districts: larger household consumption, lower poverty rate, and higher literacy. However, the positive impacts from mining decrease significantly with administrative and geographic distance from the mine, while district-level consumption inequality increases in all districts belonging to a producing province. The inequalizing impact of mining activity, both across and within districts, may explain part of the current social discontent with mining activities in the country, even despite its enormous revenues.JEL Classification: D7, H7, O1, Q3

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supporting

confidence: 69%

mentioning

confidence: 99%

Poverty, Inequality, and the Local Natural Resource Curse

Loayza

Teran

Rigolini

2013

Policy Research Working Papers

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“…It occurs because the transfer of power is not followed the transfer of capability of local government. Moreover, limited administrative capacity and local economic conditions may worsen the situation (Irawan, 2015;Khan, 2016;Loayza, Rigolini, & Calvo-González, 2014). As consequence, it leads to an expanding gap.…”

Section: A Fiscal Decentralization and Intergovernmental Grantmentioning

confidence: 99%

The Linkage of Intergovernmental Transfer and Poverty in Indonesia

Putra¹

2017

JBP

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Decentralization is expected to reduce poverty. Through fiscal decentralization, poverty may be reduced by optimizing intergovernmental grants. However, its effect on poverty is beginning to be questioned after some districts in Indonesia showed slowing performance on poverty reduction despite increasing transfer. Thus, this paper tends to investigate the linkage of intergovernmental transfer (IT) and poverty in Indonesia. By using panel data from 2005 to 2013, the linkage is tested using linear regression model. The result shows that increasing 1% of IT allocation will reduce poverty absolute by 0.12%, or 10% increase of IT will reduce poverty by 1.24%. The intergovernmental transfer also directly affects poverty gap and poverty rate. Increasing 10% of IT will reduce the poverty gap and poverty rate by 9.49% and 31.73%, respectively. Moreover, DAU (unconditional intergovernmental transfer) has a higher effect than DAK (conditional intergovernmental transfer) on poverty eradication. An increase of DAU by 1% will reduce the poverty number by 0.068%, in contrast, DAK only has 0.0418% to reduce poverty. However, as the difference is relatively small, the effectiveness of DAU on poverty is not consistent with the decentralization theory. Unconditional grant must have a significant difference than conditional grant on poverty. It may indicate that the DAU has been spent ineffectively and inefficiently. It may also indicate that it has been spent on not pro-poor policies. Thus, fiscal decentralization in Indonesia needs to be reevaluated in order to support poverty alleviation program.

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“…Loayza et al (2014) Loayza et al [2014] for further information). It is in this context that the Camisea Gas Project was implemented.…”

Section: The Camisea Gas Projectmentioning

confidence: 99%

“…transfers and staff ). As will be seen, staff is a particularly important variable as we use it to proxy municipal absorptive capacity (Loayza et al 2014).…”

mentioning

confidence: 99%

Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru

Corral¹,

Henderson²,

Miranda³

2016

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work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. AbstractWe study the economic effect of windfall gains by examining a Peruvian natural experiment. The Camisea Fund for Socioeconomic Development (FOCAM) is an inter-governmental fiscal transfer scheme that allocates natural gas royalties generated by the Camisea Gas Project to eligible subnational governments. We exploit the rules governing FOCAM allocation to identify the effect of the transfers on municipal accounts, local infrastructure, and economic development. Using a newly constructed districtlevel dataset for the years 2005 and 2012, we find evidence of positive impacts on municipal capital expenditures and local infrastructure. However, we also find evidence of a negative impact on municipal current expenditures. More specifically, we find that municipalities with low absorptive capacity coped with the increased administrative burden of FOCAM transfers by reallocating administrative effort toward (away from) executing capital (current) expenditures.

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More Than You Can Handle: Decentralization and Spending Ability of Peruvian Municipalities

Cited by 19 publications

References 23 publications

Poverty, Inequality, and the Local Natural Resource Curse

Poverty, Inequality, and the Local Natural Resource Curse

The Linkage of Intergovernmental Transfer and Poverty in Indonesia

Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru

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