Fiscal descentralization and efficiency in social services at the territorial level in Colombia

Abstract

The decentralization process in Colombia has been implemented for more than twenty years. This has been characterized by the resource transference from the central level to the territorial entities so they fulfill their competences in basic services for the population welfare. Transferences in Colombia have increased from 1.6% 1987 GDP percentage to 5.8% 2004 GDP percentage. The transference system was modified due the economic difficulties in the country in 1999, and from 2001 these resources are not tied anymore to the economic growth of the country as it was established by the 1991 Constitution. This investigation tries to carry out a qualitative and quantitative analysis, to verify the relation between the amounts of resources transferred to the territorial entities and its implementation to social services in education, health and basic services (aqueduct and sewer system) in 2005, in order to measure the impact in terms of coverage and quality for Colombian population. A way to analyze the efficiency in the public territorial management is to apply the Data Envelopment Analysis (DEA), which uses lineal programming techniques to observe, analyze and study the management of a territorial entity with the support of the economic theory and following a temporal analysis that includes both the required inputs and the obtained outputs. This research found that although the fiscal decentralization process gives functions and resources to the territorial entities in order to provide basic social services to the population, the global performance is far away to show the required efficiency levels, when comparing the inputs with the outputs. This is due to problems in management, use of inputs and obtaining outputs.