The Politics of Fiscal Reform in Colombia

• In Event: The Political Dynamics of Taxation in Latin America: Current Reforms and Comparative Perspectives

Abstract

Fiscal reforms in the developing world tend to emerge out of a dire need to extract additional revenue in the context of budgetary crises. This is because additional extraction tends to be unpopular and therefore politically very costly. Why then did the government of Colombia carry out a comprehensive tax reform in 2012 that was intended to be revenue neutral, but nonetheless generated animosity from important sectors of society? Why did the government not seek to raise additional revenue as part of the reform? What were the distributional consequences of the new fiscal arrangement? In answering these questions, this study will make a contribution to our understanding of the factors conducive to fiscal reforms in Latin America.

Author

• Gustavo A Flores-Macias, Cornell University