- Inclusive Green Growth and Informality
Authors: Cristina Fernández, Francisco Fernández, Nicolás Gómez.
This paper analyses the relationship between informality and environmental performance of companies, with special emphasis on those companies related to the mining, agricultural, forestry, construction and waste management sectors. Out of the different measures of informality used, business informality stands out (non-compliance with legal registration requirements, accounting and taxes). At a national level this type of informality reaches 63%, moreover, for the sectors of analysis it ranges between 40% (coal) and 93% (waste management). The main conclusion of this study is that a positive, significant and robust relationship holds between formal firms and good environmental performance. Additionally, there is evidence of a series of common determinants for these two variables, which validates the idea that the high correlation is partly explained by mutual causality. Policy recommendations include the promotion of associative programs that lead to an increase in production scales, as well as programs that benefit the establishment of property, reduce environmental procedures and favor environmental seals.
- Evaluation of the Unemployed Protection Mechanism
Authors: Jairo Núñez, Renata Samacá, Stefano Ferné, Natalia Ariza.
Since 2013, Colombia has the Unemployed Protection Mechanism (MPC for its acronym in Spanish), seeking to facilitate entrance to the labor market and reduce the vulnerability associated with the loss of employment. By the end of 2017 the MPC had delivered more than 428,000 subsidies, trained about 1,098,813 people, and provided career guidance for more than 1,160,418 people through the Public Employment Service. Results of this program evaluation show the need to adjust the design of the MPC in order to consider regional, age, and gender differences that lead to specific demands for services. In particular, the study highlights the need to integrate information systems to improve MPC operation, to implement a monitoring system based on the development of skills, and to regulate the use of resources from the Fund for Employment Promotion and Protection Against Unemployment generating incentives to quality, efficiency and relevance of the services provided by the Family Compensation Funds.
- Registration and loyalty to the BEPS system
Authors: Jairo Núñez, María del Pilar Ruíz, Olga Téllez, Carlos Castañeda.
In response to the low coverage of the General Pension System (SGP) (currently only 25% of the population over 65 years has a pension), and taking into account the active population that frequently migrates between formal and informal jobs (or remain informal), the National Government implemented in 2015 the Periodical Economic Benefits Program (BEPS for its acronym in Spanish). This program seeks to guarantee a periodic benefit for those who will not be able to have a pension but have some saving capacity. Results show that one of the greatest challenges is to be able transmit financial information in a reliable way in order to encourage savings. Policy recommendations include removal of the savings cap of $900.000 COP per year, particularly for those between 50 and 60 years, as well as allowing simultaneous contributions to the SGP and BEPS.
- La Guajira: Department and Municipal Characterization
Authors: Astrid Martínez, Peterson Medina, Juan D. Pachón.
This paper characterizes the department of La Guajira, by analyzing its economic and social indicators and identifying gaps relative to the rest of the country. The 2005 Census results show that indigenous population represents 45% of the total population of La Guajira. The study shows that La Guajira has an average rurality index, but there are completely isolated populations where the problems of child malnutrition and unsatisfied basic needs are concentrated. La Guajira is the second department in Colombia with the highest monetary poverty after Chocó. As to economic activity, mining sector represents nearly 50% of the department´s total production. In terms of institutional capacity, this department has improved its fiscal results, but risks persist, such as the level of contingent liabilities and the low own fiscal effort persist.
- Tax Reform Proposal for Bogotá that promotes firms competitivity and financial sustainability
Authors: Juan Gonzalo Zapata, Daniela Trespalacios.
This paper explores the tax structure in Bogotá and its relationship with the productive sector. The paper consists of four studies and a final report which summarizes all studies and makes recommendations regarding a reform of the tax structure. One of the studies analyses the recent dynamics of the District’s finances, showing the capacity to generate its own resources, but reflecting a vulnerability towards economic cycles since 65% of its income comes from productive activity. Comparisons regarding tax collection where made between Bogotá and the municipalities of the subsabana with the main cities of the country. Another study analyzes business informality in Bogotá and the difficulties that exist for business formalization. In addition, recent regulatory reforms that have been made on this subject, including monotax, are also analyzed. There is a third paper, which portrays some financing strategies different from the traditional ones used by megacities such as Tokyo, Mexico, Sao Paulo and Singapore. The Public Private Alliances (APP for its acronym in Spanish), the capture of surplus value, the contribution for improvements, the levies and charges for construction and the Tax Increment Financing (TIF), are some of the mechanisms analyzed. Is it clear that the city needs these tools because traditional sources of financing are not enough to support the infrastructure challenges that a large city like Bogota and its neighboring municipalities will face in the near future. Finally, the fourth study analyses tax pressure of medium and large companies in Bogotá and its municipalities. Thus, when analyzing the effective tax rate, important differences were found in Bogotá when compared with Cundinamarca. In addition, based on interviews with businessmen, the statistical results were valued and proposals to improve the management of taxation of these companies were refined.
- The Political Economy of Trade Policy in Colombia
Authors: María Arbeláez, Sebastián Higuera, Roberto Steiner, Sandra Zuluaga.
This paper studies the reasons behind trade protection for some “sensitive” agricultural products in Colombia. Case studies in rice and sugar plantations show that groups of interest (growers, entrepreneurs and unions) are well organized and have influence at different levels, including Congress and in highly politicized agricultural sector entities that are very active in the design of the sector´s trade policy. These groups of interest also influence economic conglomerates, particularly those who possess means of communication. The analysis shows that once technical public entities such as the Superintendence of Industry and Commerce are involved in commercial policy there is a prevalence of free market policies over protectionist measures and defense of consumers and industries that use agriculture as inputs is promoted.