Last week, I was invited to speak in the debate on the constitutional reform project that seeks “strengthen the autonomy of departments, districts and municipalities” in the Fourth Constitutional Commission of Congress. What could be a key reform for subnational autonomy seems so far to be a maneuver with high fiscal risk and limited institutional vision. I trust that there is still room to correct course.
(See: Reform of the General Participation System: implications beyond the economic).
The core of the proposal is to increase, in ten years, the participation of territorial entities in the nation’s current income to reach 46.5%. This increase has the support of the Ministry of the Interior and several governors, but faces serious objections even within the government. Both the Ministry of Finance and the DNP have warned that it is fiscally unsustainable and question its constitutionality. These criticisms were joined by Fedesarrollo, Anif, the Javeriana Fiscal Observatory and the Autonomous Committee of the Fiscal Rule, whose projections indicate that, in a context of inflexible national spending, reaching that level of participation would generate a fiscal crisis that, ultimately Ultimately, it will fall on all citizens.
Although the debate was marked by great ambitions and serious fiscal concerns, I focused my intervention on another crucial, but less discussed, angle: the lack of concrete proposals to strengthen capacities at the subnational level and the absence of real mechanisms for territorial participation in national decisions that directly affect their interests. The promoters of the reform seem to overlook that a greater transfer of resources does not guarantee better management, as demonstrated by the failures of the “water bonds.” Without a solid implementation structure, these resources can fuel cronyism and perpetuate inefficiencies.
(See: Former Finance Ministers ask Congress to reconsider the SGP reform project).
Contrary to what is defended by the Ministry of the Interior, a constitutional reform could include principles for the assignment of powers and address key dimensions for the empowerment of territorial entities. As suggested by the Decentralization Mission, management capacity, social, political and security factors, and the results obtained in the assigned competencies could be considered. Besides, The subnational fiscal structure could be rethought and additional spaces created for the Regional Autonomous Corporations to be able to move towards a territorial organization that revolves around water. In the Decentralization Mission, where I collaborated as a consultant, we generated valuable inputs to integrate these critical elements.
(See: This is the proposal that would accompany the reform of the General Participation System).
During the debate, an eloquent governor argued that the priority should be increasing resources, and that subnational capabilities would be developed later. This vision, although tempting for some leaders, is short-term and prioritizes immediate interests over the construction of sustainable capabilities. Furthermore, it ignores the reality of many territorial entities with fewer resources and capabilities. A 2012 Dafp study, for example, revealed that In more than three quarters of the municipalities, the staff has between one and six professionals; In 62% of cases, they only have one to three professionals.
Paradoxically, this reform reminded me of the recentralization reforms of 2001, 2007 and 2011, which also prioritized the control of resources without strengthening local capacities. By focusing almost exclusively on resource allocation, this draft legislation appears more like a tactic to curry favor with subnational rulers than a genuine effort for territorial development. Even the recent adjustment to the project – according to which the legislative act would only come into force after the approval of a competition law – seems more like a strategy to retain support than a guarantee of substantial reform.
In my book Recentralization in Colombia (Palgrave, 2022), I explain how in a predominantly recentralized context, the decrease in central government revenues erodes its bargaining power with territorial entities, creating conditions for a shift towards decentralization. This reform could be an opportunity to move in that direction, but not under its current structure. On the other hand, as I also document in the book, governors have consolidated considerable power in Congress through prerogatives granted in recent reforms, such as water resources in 2007 and royalties in 2011, at the expense of municipalities and zones. producers. During the debate in the Fourth Committee, the magnitude of that power was evident.
(See: Anif asks the Senate to listen to the specialists in the debate on the reform of the SGP).
In conclusion, it is clear that the country needs solutions to confront its paralyzing centralism, but subjecting it to a risky fiscal reform is not the way. Colombia will not reach its potential as long as it maintains such a centralized institutional system. However, with this project in its current form, The country could face a serious fiscal crisis without improving rights and services in municipalities and departments with lower capacities, precisely the areas that most supported the President in his election.
JULIÁN LÓPEZ MURCIA
PhD (Oxford)
