Equity analysis on the distribution of public revenues and social and territorial spending in Bolivia

Abstract

Among the public goods provided by subnational governments, a distinction should be made between "social goods" -such as school education and health services- and "territorial goods" -as basic infrastructure services-since the criteria of equity are different: while in the In the first case, the same minimum level should be guaranteed to all the inhabitants of the country, regardless of their place of residence, in the second case it should be guaranteed that the same local fiscal effort -measured according to the income levels of the citizens of each country. locality- corresponds an equal level of provision. In the present work it is estimated, for each municipality, the effective levels of provision of education per student and of health services per potential patient, and of "municipal territorial assets" that their inhabitants perceive for each 0.1% of consumption that they contribute to their municipality, quantifying the negative effects, in terms of equity, of the current transfer systems. The establishment of departmental autonomous governments represents an exceptional opportunity to modify these systems in order to contribute effectively to equity.