Conditional Windfalls: CCT Benefits and Local Taxation in Colombia

• In Event: Emerging Scholars Lightning Round: Undergraduate Research

Abstract

Do large welfare programs act like windfalls on local governments, allowing them to avoid responsibility for raising revenue of their own? In this paper, I study the effects of a large conditional cash transfer (CCT) program on local property taxation in Colombia. I find that there does seem to be a significantly negative relationship between welfare and property taxes, but only before a 2012 redesign of the program, when it patched up inscription errors and was divorced from the personalistic politics of president Álvaro Uribe. Follow-up tests suggest that the negative pre-2012 relationship was largely driven by mayors in Uribe’s coalition.

Author

• Alexander Armand Del Greco, Swarthmore College