The Colombian Departments and the Investment of Funds from the General System of Royalties, 2011 – 2015

Abstract

This paper describes how, due to the introduction of the General System of Royalties (SGR in Spanish) in 2012, the Colombian departments now not only administer more funds but also have more participation in choosing the projects to be financed. We also analyze whether their fiscal performance varied between 2012 and 2013 and how they have invested royalties between 2012 and 2015. We find that in 80% of the departments, the proportion of income from their own resources was higher in 2013 than in 2011, while in eight departments the share of investment spending decreased, although on average they received more royalties since 2012. Although the transport sector has the largest share in investment with royalties, there are differences between producing and non-producing departments on sectors that they favor.