Chilean Municipalities Analysis: Management Revenues versus Transfers from the Municipal Common Fund

Authors

  • Mario Pérez Universidad de Chile

Abstract

This study focuses on analysing the possible effects on the own revenues from municipalities management if more resources are transferred through the Municipal Common Fund (FCM). For this, a fixed-effect regression model with panel data between 2009 and 2012, obtained from the National Municipal Information System (SINIM), is used. Transfers from the FCM have a negative impact on own-managed revenues only to a group of communes (47), classified by the Sub-Secretariat for Regional Development (SUBDERE) as "Big metropolitan communes with high and / or medium development". In these communes, the average is almost 5 units less of revenue per management collected by 1 unit plus contribution of the FCM. However, for the rest of the municipalities of the country, there is insufficient evidence to determine that this phenomenon known as "fiscal laziness" exists (Raich, 2004).

Keywords:

Municipal fiscal financing, decentralization, fiscal laziness, Municipal Common Fund