This chapter examines urban governance in Colombia. It assesses the main challenges presented by the current system of multi-level governance in the framework of the decentralisation process. It argues that although municipalities have been given extensive competencies in urban development, they have not been given the means to perform their new tasks. The chapter begins with a discussion of the Colombian urban governance framework, focusing on vertical co-ordination across levels of government and metropolitan governance. This is followed by an examination of the financing of municipalities and proposals to improve their financial capacity to complement the fiscal decentralisation process. The chapter ends with a discussion of the need to improve the capacity for managing the public workforce, fostering evidence-informed policy making and engaging with stakeholders for urban development.
National Urban Policy Review of Colombia
5. Strengthening Colombia’s urban governance framework
Abstract
Introduction
Improving Colombia’s ability to design and implement its urban development agenda depends on having a solid, flexible, co-ordinated and dynamic governance framework that allows for an integrated and strategically driven approach to urban development. The governance framework needs to bring together national, departmental and municipal public and private actors as well as civil society and social organisations around a common vision and shared objectives. It should encourage and facilitate cross-sectoral policy making based on the broader strategic objectives of the National Development Plan (Plan Nacional de Desarrollo, PND). It is also essential to enhance the financial capacity of municipalities to finance local investment projects and join forces with neighbouring municipalities for investment and public service delivery if Colombia wants to improve its subnational governance arrangements that underpin its efforts for an increase in productivity and competitiveness in urban areas. Nurturing a talented public workforce with the right competencies and skills is critical to strengthening the capacity of municipalities to generate urban development plans and programmes tailored to their specific needs.
Colombia is in the process of revamping its national urban policy (NUP) to strengthen current policy actions aimed at building cities that are compact, connected, productive, inclusive, sustainable and innovative. Discussions on the new urban policy, called Cities 4.0, have covered these issues, which are very diverse and interconnected. They demand a multi-level, multi-sectoral and integrated policy approach. Building cities with those characteristics may be difficult in the absence of suitable governance arrangements, government capacities and sound planning.
This chapter discusses Colombia’s governance structure, with a particular emphasis on multi-level governance and the schemes available to municipalities to join forces for urban development. It also discusses ways to improve the institutional and financial capacity of municipalities to decide on how to invest their resources. A brief discussion on the need to improve municipal governments’ capacity for urban development will conclude the chapter.
Colombia’s urban governance framework
The national government faces implementation and co-ordination challenges
The Colombian national government establishes the general NUP framework that guides the urbanisation process. According to the Land Management Law (Gobierno de Colombia, 1997[1]), the central government is responsible for designing and implementing the general policy for land use planning in matters of national interest, setting the criteria to guarantee an equal distribution of public and social services across regions, locating large infrastructure projects, setting the guidelines of the urbanisation process and the National Policy for the Consolidation of the System of Cities in Colombia, know as the System of Cities, designing guidelines for the equitable distribution of public services and social infrastructure, and the measures for the conservation and protection of natural and cultural heritage.
There are three main urban policy actors at the national level
Three main national-level actors have responsibility in urban policy: i) the National Council for Economic and Social Policy (Consejo Nacional de Política Económica y Social, CONPES); ii) the Department of National Planning (Departamento Nacional de Planeación, DNP); and iii) the Ministry of Housing, City and Territory (Ministerio de Vivienda, Ciudad y Territorio, MVCT). Other institutions also have a specific sectoral responsibility in policies that have a direct impact on urban development, such as the Ministries of Environment and Sustainable Development, and Transport (Box 5.1). This is not unusual across OECD countries. In Finland, for example, the Ministry of Economic Affairs and Employment is co-leading the NUP with the Ministry of the Environment (OECD/UN-Habitat/UNOPS, 2021[2]).
CONPES, created in 1958, is the most important policy co-ordination institution in the government and the highest national planning authority. It serves as an advisory body to the national government on all aspects related to the economic and social development of Colombia. It co‑ordinates and guides the agencies responsible for economic and social policy. It conducts studies and approves documents on general economic and social policy known as CONPES documents (Gobierno de Colombia, 1958[3]). It endorses for possible consideration and approval by congress the four-year PND, which presents the policy agenda of the administration. CONPES is composed of the President of the Republic and four councillors: two appointed by the president, one by the senate and one by the Chamber of Representatives for a four‑year period open to re-election.
Box 5.1. Primary actors in urban development at the national level in Colombia
The National Planning Department (Departamento Nacional de Planeación, DNP), created through Law 19 of 1958, is a technical entity, with the rank of a ministry, which promotes the implementation of the country’s strategic vision in the social, economic and environmental sectors through the design, orientation and evaluation of public policies. Its main responsibility is to support line ministries, administrative departments and territorial entities in designing, monitoring and evaluating the implementation of policies, plans, programmes and projects that advance the PND. It co-ordinates the formulation of the PND across ministries, territorial authorities and administrative planning regions. Once the plan has been approved by congress, the DNP co-ordinates the implementation, monitoring, evaluation and management of results of the plan’s content. To this end, it approves procedures and guidelines for the design, monitoring and evaluation of all of the different programmes and projects contained in the plan. The DNP is also responsible for structuring the methodology for the design, monitoring and evaluation of the policies, programmes and projects contained in the PND and the methodologies for the identification, formulation and evaluation of projects financed using national resources. Its Urban Development Department (DDU) guides and promotes policies, plans, programmes, studies and investment projects in urban development, housing, public services, water, sanitation and social services. The DNP is also responsible for the follow-up and monitoring of the 2030 Agenda dealing with 16 major goals expected to fulfil the United Nations (UN) Sustainable Development Goals (SDGs).
The Ministry of Housing, City and Territory (MVCT) was created through Law 1444 of 2011. It formulates, guides and co-ordinates policies, plans and programmes on housing, urban development, land use, urban renewal, water and sanitation. The MVCT is responsible for the formulation of policies on urban renewal, comprehensive neighbourhood improvement, housing quality, urban planning and construction of sustainable housing, public space and equipment. It co-ordinates and monitors public and private entities in charge of housing production. It prepares, in co-ordination with the DNP, sectoral policy proposals for consideration, discussion and approval by CONPES. The ministry also articulates housing and housing finance policies with those of drinking water and basic sanitation and, in turn, harmonises them with policies on the environment, infrastructure, mobility, health and rural development. The MVCT has to co-ordinate its policies with the departmental (regional) and municipal governments to harmonise and strengthen the planning and execution of housing and urban development projects.
The Ministry of Environment and Sustainable Development (MADS) is in charge of the design and implementation of national policies related to the environment and renewable natural resources. It also establishes rules and criteria of environmental planning to ensure the conservation and sustainable use of land and oceans. Together with the DNP, it prepares plans, programmes and projects on environmental matters that must be incorporated into the projects of the PND and the National Investment Plan. In co-ordination with other ministries and state entities, MADS also establishes the environmental criteria that must be incorporated into sectoral policies.
The Ministry of Transport (MT) is in charge of formulating and adopting the policies, plans, programmes, projects and economic regulation of transport, transit and infrastructure, in the country’s road, maritime, fluvial, railway and air modes of transport. It participates in the formulation of the country’s economic and social policy, plans and programmes. The MT is also responsible for the preparation of the sectoral plan for transport and infrastructure, in co-ordination with the DNP and sectoral entities. The MT establishes the provisions for the integration and strengthening of transport services.
The Ministry of Agriculture and Rural Development (MADR) is responsible for the design and implementation of policies of the agricultural, fisheries and rural development sectors. It guides and oversees the activities of the Unit for Agricultural Planning.
The Unit for Agricultural Planning (UPRA) defines the criteria and designs instruments for the management of rural land suitable for agricultural development, which serve as a basis for the definition of policies to be considered by the territorial entities in the land use plans (planes de ordenamiento territorial, POTs).
Source: Observatorio Regional de Planificación para el Desarrollo de América Latina y el Caribe (n.d.[4]), Departamento Nacional de Planeación (DNP) de Colombia, https://observatorioplanificacion.cepal.org/es/instituciones/departamento-nacional-de-planeacion-dnp-de-colombia; Minvivienda (n.d.[5]), Ministerio, https://minvivienda.gov.co/ministerio; Ministerio de Medio Ambiente y Desarrollo Sostenible (n.d.[6]), Noticias, https://www.minambiente.gov.co/#; Unidad de Planificación Rural Agropecuaria (n.d.[7]), Homepage, https://www.upra.gov.co/ (accessed in August 2021); Ministerio de Transporte (n.d.[8]), Homepage, www.mintransporte.gov.co/ (accessed 15 July 2021); Ministerio de Agricultura y Desarrollo Rural (n.d.[9]), Homepage, https://www.minagricultura.gov.co/paginas/default.aspx (accessed 15 October 2021).
The DNP is one of the most important entities of the executive power in Colombia as it co-ordinates national policies among ministries at the national level and conducts consultation of policy across levels of government. It acts as the technical secretariat for the Territorial Management Commission (Comisión de Ordenamiento Territorial, COT). The DNP is responsible for the allocation and management of the investment budget in the regions, which was COP 223 billion (approximately USD 60 million) in 2019. It also plans the execution of the country’s resources in co‑ordination with the different regions. It serves as the executive secretariat of the CONPES. The DNP led the elaboration of document CONPES 3819 for the consolidation of the System of Cities (Gobierno de Colombia, 2014[10]).
The MVCT has overall responsibility for urban policy and planning at the national level, in co-ordination with the DNP. One of its main challenges is to reduce the qualitative and quantitative housing deficit in the country through social programmes for medium- and low-income households. The MVCT and DNP are responsible for developing an integrated approach for sustainable urban development that links urban renovation with economic development, social inclusion and environmental protection practices.
To foster co-ordination across policy sectors on territorial organisation, the government established the COT, which is a technical advisory body created by the Organic Law for Territorial Organisation (Ley Orgánica de Ordenamiento Territorial, LOOT) (Gobierno de Colombia, 2011[11]). The COT’s function is to evaluate, review and suggest to the central government and national congress policies and regulations for a more effective organisation of the territory. The Ministry of the Interior (MI), MVCT, MADS as well as the Agustín Codazzi Geographical Institute (IGAC), the Regional Autonomous Corporation (CAR) and experts in the field representing public and private universities are all part of the COT. The DNP acts as the secretariat of the commission. The COT reviews and evaluates sectoral policies related to territorial planning. It also advises territorial departments and municipalities on their integration. The COT is in charge of the formulation of the General Policy of Territorial Management (Polítical General de Ordenamiento Territorial, PGOT) and promotes the articulation of different sectoral policies with the NUP.
Several other institutions play a role in urban policy. For example, the National Administrative Department of Statistics (Departamento Administrativo Nacional de Estadística, DANE) designs, plans, guides and implements statistics for evidence-based policy making. The Ministry of Mines and Energy deals with the quality of fuels and zero-carbon emissions. The Ministry of Culture leads projects to boost the cultural and creative potential of territories (orange economy). The National Unit for Risks and Disasters Management (UNGRD) supports national, departmental and municipal governments in the inclusion of a risk management component in their land use and development plans. The IGAC produces official maps and basic cartography to elaborate the national cadastre, builds the inventory of land characteristics and leads and co-ordinates the national spatial data infrastructure ICDE. The Institute of Hydrology, Meteorology and Environmental Studies (IDEAM) establishes the technical bases to classify and define land use for territorial planning at the national and regional levels.
The challenge of implementing policies and plans in Colombia
Colombia has solid experience in plan and policy making but implementation remains weak and is Colombia’s main difficulty in improving urban outcomes. This begs the question of whether possible implementation problems were considered and anticipated during the stage of policy design or plan-making. Land use plans (planes de ordenamiento territorial, POTs) are an example of limited implementation as municipalities generally lack the financial resources to carry out the activities contemplated in those plans (see Chapter 3).
Urban policy is relevant to and impacts on a number of different stakeholders from different levels of government and sectors, but their views on their roles and goals and the strategies to achieve them may likely diverge. Thus, the task for Colombian policy makers is to find a balance between all different views, build consensus and ensure that no single actor or group jeopardises implementation. A challenge is the “one-size-fits-all” approach taken in the NUP, which fails to recognise the heterogeneous nature of Colombian cities. For example, the coastal cities of Barranquilla and Cartagena face climate-change-related challenges such as floods and erosion of constructions (Milanés Batista, Meza Estrada and Cochero Cermeño, 2018[12]), while cities closer to the Venezuelan border (e.g. Arauza, Cúcuta, Puerto Carreño) are dealing with immigration flows that push to the limit their capacity for service delivery.
Moreover, the implementation of urban policy does not depend on a single ministry or agency alone but on the co-ordinated and collaborative involvement of different ministries, agencies and administrative departments at different levels of government. As will be discussed below, Colombia has a highly fragmented and siloed approach to policy making, which could be affecting implementation.
Two other factors that limit the implementation of urban-related policies are the weak institutional landscape and the crowded legal framework with a complex hierarchy of dispositions. Regarding the institutional landscape, the lack of multi-sectoral co-ordination at the national level stands out. The COT, which could be a co-ordinating agent of urban policy and territorial management, lacks the power to enforce its decisions and enact an agreed co-ordinated agenda for land management and urban development. Colombia may need to consider alternatives to strengthen the COT and make its decisions binding. There is a lack of co-ordination across levels of government, largely due to the overlapping responsibilities across the different levels of government and the large number of policies that are not always articulated with each other. Colombia lacks an effective forum where national and subnational urban authorities meet regularly to discuss and agree on a vision on urban issues.
The challenge of co-ordinating a large number of NUP actors
Given the large number of actors that take part in the urban development process, Colombia needs to develop an institutional framework that provides the incentives and mechanisms that enable policy co‑ordination. At present, collaboration and co-ordination for policy programming are dependent on the DNP’s ability to engage with sectoral agencies. Although the elaboration of the CONPES 3819 document for the consolidation of the System of Cities involved participation from a wide range of actors from different sectors and levels of government, policy implementation, approaches to urban development and management remain siloed, with limited cross-sectoral dialogue. Once the PND has been approved by congress, individual policy decisions affecting the plan’s implementation, such as urban policy, are made by the president and implemented by line ministries under the co-ordination of the DNP (OECD, 2013[13]) This creates a context where urban issues such as transport, housing, spatial planning and other policies are usually planned by different authorities, at different levels of government and in different institutional settings. It is currently difficult to assess to what extent line ministries can contribute their knowledge, expertise and know-how to urban policy making and implementation. For example, it is not clear whether ministries such as those in charge of the economy, finance or health are engaged in urban policy discussions. A lack of inter-ministerial dialogue may reinforce a narrow and sectoral perspective on urban policy matters. An example is the Biodiverciudades programme, which is managed by MADS but with little involvement from other national ministries and agencies, in particular the MVCT. It is also difficult to determine to what extent line ministries and other agencies feel they have ownership on the System of Cities despite several institutions taking part in its implementation according to the action plan. Their actions are therefore not guided by this policy and do not aim to contribute to the programme. This type of issue should be the focus of the COT and the DNP, which should review and provide options to ensure all related actors contribute to common objectives.
For Colombia, breaking silos is essential to maximise synergies and complementarities across the different government institutions and existing human and financial resources. For example, the System of Cities, the country’s NUP, promotes a more compact urban development. If Colombian authorities want to continue with the compact city approach in their next NUP, they need to foster sectoral policy complementarities. Compact city policies can be more effective if they are combined with policies on the environment, renewable energies and energy efficiency in buildings. While most of these policies are already in place in Colombia, they need to be managed with a holistic view to build synergies among them. The experience of OECD countries shows that, for example, when congestion charges and high parking fees are combined with mass-transit expansion, these actions can be mutually reinforcing (OECD, 2012[14]). To build complementarities, Colombia may draw inspiration from the US Partnership for Sustainable Communities to co-ordinate housing, transport and other infrastructure investments and, in doing so, to promote reinvestment in existing communities (Box 5.2). This is an option that Colombia could explore, in which the DNP and MVCT co-lead the partnership. For example, Biodiverciudades could be managed through a cross-sectoral partnership to be more effective.
The elaboration of the new NUP should pay particular attention to breaking silos by combining compact city policies with other urban economic initiatives that the government wants to promote, such as labour policy and innovation. This is not new in Colombia as the National Development Plan 2014-2018 called for an interagency commission to co‑ordinate housing, urban development and transport efforts, bringing together the then Ministry of Housing and Urban Development, the Ministry of Transport, the Ministry of Culture and the Ministry of Finance. Colombia should continue fostering that co‑ordination but make it more systematic.
Box 5.2. The US Partnership for Sustainable Development – An example of cross-sectoral co‑ordination
In 2006, the US government created the US Partnership for Sustainable Communities, which is a collaboration among the Department of Housing and Urban Development (HUD), the Department of Transportation (DOT) and the Environmental Protection Agency (EPA). The collaboration marked a change in how the US government structures its transport, environmental and housing policies, programmes and spending. The three agencies support the efforts of urban, suburban and rural communities to expand housing and transport choices, protect air and water, boost economic growth and promote well-being. The Partnership for Sustainable Communities is guided by liveability principles:
Provide more transportation choices.
Promote equitable, affordable housing.
Enhance economic competitiveness.
Support existing communities.
Co‑ordinate and leverage federal policies and investment.
Value communities and neighbourhoods.
The joint work of the three agencies led to the distribution of nearly USD 2 billion in grants to support vital transport infrastructure, equitable comprehensive planning and brownfield redevelopment. Some of the resources were targeted to areas where disinvestment and industrial pollution have led to a legacy of contaminated sites. The partnership also assists organisations in building capacity for environmental justice and equitable development.
Source: EPA (2010[15]), Partnership for Sustainable Communities: Supporting Environmental Justice and Equitable Development, https://archive.epa.gov/epa/sites/production/files/2014-08/documents/2010_1230_psc_ejflyer.pdf.
Another option for Colombia to ensure cross-sectoral co-ordination could be to set up a National Council for the Co-ordination and Evaluation of the National Urban Policy (Figure 5.1). Its main responsibility would be to ensure that all national-level actors are aligned towards the achievement of NUP objectives. It would not replace CONPES as it would not be in charge of defining policy but its mandate would be to ensure its implementation through the co-ordination of all line ministries and national-level agencies that have responsibility for plans and programmes related to urban development. The council could have an Executive Committee for Urban Development, whose role would be to agree on, co-ordinate and communicate top-level strategies on urban development among ministries and other bodies. It could meet two to three times a year with representation at the ministerial level and be chaired by the MVCT. The council could have a Working Group on Urban Development that would be the hub for cross-sectoral co‑ordination. It could oversee the implementation of the NUP and the different sectoral plans and programmes (e.g. housing, transport, land use, environment, urban regeneration, water, etc), conduct reviews and identify priorities and policy gaps. It would meet every two months with representation at the directorate level and be chaired by the MVCT. Moreover, the council could have a Dialogue Group with Local Governments where national-level representatives responsible for the NUP could meet on a regular basis with representatives of local governments (e.g. Association of Capital Cities [AsoCapitales], municipal and metropolitan associations, and representatives from the departmental governments) to co‑ordinate and assess progress on urban development. An Urban Development Advisory Group with representatives from academia, non-governmental organisations (NGOs) and the private sector could support the working group and the dialogue group. The MVCT could also set up a unit to function as the co-ordination secretariat in charge of the day-to-day business of the council. The DNP would be in charge of overseeing the evaluation of the different programmes that form the NUP and assessing their impact.
Figure 5.1. Proposal for a National Council for the Co-ordination and Evaluation of the National Urban Policy
The subnational level is composed of legally autonomous territorial units and territorial associative schemes
Colombia is a unitary state. Its territorial governance structure, as established in the constitution, is based on 32 departments, 1 102 municipalities and 11 districts. The roles and responsibilities of the national and subnational governments are defined by the 1991 Constitution, the Organic Law on Territorial Organisation (LOOT) (Gobierno de Colombia, 1997[1]), the Law of Regions (Gobierno de Colombia, 2019[16]) and other regulations Figure 5.2 presents the different responsibilities of each level of government regarding the territorial organisation.
The competencies and responsibilities of each level of government are set in the 1991 Constitution and other regulations (Laws 388 of 1997, 715 of 2001, 1176 of 2007, 1454 of 2011, 1551 of 2012 and 1617 of 2013), in particular the Land Management Law that guides urban development at the local level (Gobierno de Colombia, 1997[1]). Departments and municipalities share a majority of competencies in education, health, water, sanitation and housing (Table 5.1) (OECD, 2016[17]). The departments have a responsibility for planning and promoting economic and social development. They exercise administrative functions of co-ordination and intermediation with municipalities. Municipalities are in charge of public service provision such as electricity, urban transport, cadastre (when the municipality has been certified as cadastral manager or gestor catastral, otherwise the cadastre is managed by the IGAC), land use planning and police. The central government classifies municipalities as being “certified” or “non-certified” for the provision of services such as education, health, water and sanitation. It determines universal coverage and sets quality standards. Once a municipality reaches the targets and standards, it is entitled to use resources in other areas of its own competency (OECD/UCLG, 2019[18]). The DNP certifies that this universal coverage has been achieved at the request of the territorial authority. Only a few municipalities have reached the highest rating.
Table 5.1. Subnational governments’ main responsibilities by sector in Colombia
Source: OECD/UCLG (2019[18]), 2019 Report World Observatory on Subnational Government Finance and Investment - Key Findings, http://www.sng-wofi.org/publications/2019_SNG-WOFI_REPORT_Key_Findings.pdf (accessed on 28 August 2019); Gobierno de Colombia (1997[1]), Ley 388 de 1997 - Ley de Ordenamiento Territorial, https://www.minenergia.gov.co/documents/10180//23517//22687-Ley_388_de_1997.pdf (accessed on 21 April 2021).
Departments are led by governors who are directly elected every four years. They have autonomy in the management of their resources. The departments are responsible for establishing guidelines for planning the totality or specific parts of their territory, determining land use scenarios, defining policies for urban areas in line with the national framework, orientating the localisation of infrastructure and implementing programmes for the conservation of the environment (Gobierno de Colombia, 2011[11]). They act as intermediaries between the central government and municipalities, which according to the LOOT should be done through the Departmental Territorial Management Plan.
Districts are territorial entities that have specific regimes as they have special powers different from those of municipalities with the aim of promoting their socio-economic development. Some of the districts are: the Capital District of Bogotá (hereafter Bogotá, D.C.); the Special, Industrial and Port District of Barranquilla; the Special, Industrial, Port, Biodiverse and Ecotourism District of Buenaventura; the Special, Tourist, Cultural and Historical District of Santa Cruz de Mompox; the Medellín Science, Technology and Innovation District, the Touristic and Cultural Districts of Cartagena, Riohacha and Santa Marta; the Special, Sports, Cultural, Tourist and Entrepreneurial District of Santiago de Cali; and the Special, Industrial, Port, Biodiverse and Ecotourism District of Tumaco. Special districts are granted administration and financing schemes that allow greater efficiency in the fulfilment of goals and programmes. The 1991 Constitution authorises some metropolitan areas to become districts. To become a district, the territory must have at least 500 000 inhabitants or be located in coastal areas, be the capital city of a department and have the potential for the development of ports or tourism and culture (Gobierno de Colombia, 2019[19]). One of the characteristics of the districts is administrative decentralisation, which may contribute to optimising decision-making and service delivery for urban development.
Figure 5.2. Distribution of responsibilities across levels of government on the territorial organisation in Colombia
Source: Own elaboration based on Gobierno de Colombia (2011[11]), Ley 1454 de 2011 - Ley Orgánica de Ordenaminto Territorial, https://www.alcaldiabogota.gov.co/sisjur/normas/Norma1.jsp?i=43210 (accessed on 22 April 2021).
Like districts, municipalities have political, fiscal and administrative autonomy within the framework established by the 1991 Constitution. Their purpose is to ensure the general well-being and the improvement of the quality of life of their residents. Each municipality is led by a mayor (alcalde) and a municipal council, both directly elected every four years. Municipalities are responsible for providing public services and managing issues related to: public space, vehicular traffic, the provision of drinking water and basic sanitation services, the construction, maintenance and provision of official educational and sports facilities, primary healthcare centres, agricultural technical assistance, the implementation of integrated rural development programmes, the adaptation of road infrastructure, land, and public and communal services, the co-financing of social housing, the construction and conservation of road and municipal networks, the regulation of urban transport, the provision of home public services, urban safety, the promotion of peaceful co-existence and the care of vulnerable groups (OECD/UCLG, 2019[18]). Most of these competencies are shared with departments, which, within the national framework, co-ordinate, supervise and provide financial, administrative and technical assistance to municipalities and, in some cases, substituting them. Municipalities formulate and implement land use plans (POTs), regulate land use in urban and rural areas, and co-ordinate sectoral actions to ensure they are in line with national policies and regional and metropolitan development plans. Although the authorities in departments and municipalities are elected by local residents and are independent from the president, governors and mayors, they have the mandate to link the goals of their local development plans with those of the PND to have access to national resources.
Decentralisation sets the ground for territorial co-operation
When compared to other Latin American countries, Colombia is one of the most administratively, politically and fiscally decentralised countries in the region (OECD, 2013[13]; 2016[17]). However, when compared with OECD countries, Colombia ranks among countries with an intermediate level of decentralisation (OECD, 2014[20]). The country has a strong centralist presidential system, which means that urban development policies tend to be centrally established by the national government with little subnational government consultation. Over the past four decades, Colombia has gone through different waves of decentralisation and re-centralisation, aiming to strike a balance between fiscal sustainability and more shared governance. The centralist tradition has been the national government’s tool to offset the country’s natural geographic fragmentation, contain interest groups, deal with extra-democratic insurgencies and manage regionally-based ethnocultural minorities (OECD, 2013[13]). The 1991 Constitution paved the way for the enactment and implementation of several laws that enforced political, fiscal and administrative decentralisation. The PND, the LOOT, the districts and municipal governments’ legal regime, and the Public-Private Agreements Law provide subnational governments with the tools to enhance their institutional ability to face emerging challenges. For example, local authorities have the possibility to perform their tasks through associative mechanisms such as regions, metropolitan areas and public associations. These mechanisms also provide them with the option to reduce fiscal costs through the involvement of the private sector in investing in local public infrastructure and services, and thereby enhancing the quality of public service delivery.
The enactment of the LOOT in 2011, 20 years after the adoption of the 1991 Constitution, regulates the devolution of powers to territorial entities (Gobierno de Colombia, 2011[11]).1 The LOOT specifies a devolution framework by which subnational governments implement decisions and strategies designed at the central level of government while working to promote their own development. Initially, this arrangement was devoid of any transfer of policy-making or strategy-setting authority and capacity to subnational authorities. However, the national government is not always in a position to make informed decisions about the specific needs of every community. Municipalities’ administrative capacity was not always sufficient to meet their economic and social demands either. Local public actors have therefore had to fend for themselves to find alternative policy responses to the needs of their municipalities and inhabitants (OECD, 2013[13]). This has led to the creation of informal networks of political and economic actors that have shaped multi-level governance in Colombia for the last three decades. Although the LOOT clearly defines the hierarchical inter-governmental order, a complex power grid occurs in practice, in which information brokers, contracts, relations and social capital have created their own procedures without a clear multi-level framework for effective decision-making processes (OECD, 2013[13]). This has had important effects on the urbanisation process, as municipalities’ technical and financial capacity and political leadership remain rather limited to conduct, for example, comprehensive planning of their territory.
The LOOT provides for legal arrangements and forms of territorial co-operation through which different levels of government and territorial entities can choose to form strategic alliances to boost the sustainable development of the communities. These associative territorial arrangements include associations of departments, special constituency associations, associations between municipalities, associations of metropolitan areas, management and planning regions, and administrative and planning provinces (Gobierno de Colombia, 2011[11]). The Territorial Associative Schemes (esquemas asociativos territoriales, EATs) constitute another form of co-operation among departments, districts and municipalities. EATs can provide public services (e.g. transport), conduct administrative activities (e.g. cadastre management) delegated by the territorial entities or even the national government, and conduct planning activities and development projects (Gobierno de Colombia, 2019[19]).
The LOOT defines the rules for decentralisation derived from the 1991 Constitution. It provides a stable legal and policy framework that strengthens the central government’s ability to co-ordinate the implementation of decentralisation across the country. The central government may contract or agree with the territorial entities, with the associations of territorial entities and with the metropolitan areas the joint execution of strategic projects of territorial development through the formulation of a Contratos Plan (contracts plan) which specifies the contributions of each party to the project and the respective sources of funding.
Inter-municipal co-operation needs to be reinforced
One of the main challenges for the territorial organisation in Colombia is to strengthen inter-municipal co‑operation mechanisms. Like in most OECD countries, inter-municipal co-operation is based on local authorities’ wishes to join an associative scheme on terms which they themselves set in statutes governing inter-municipal co-operation. Such voluntary action reflects municipal autonomy accepted by all and stated in the constitutions and other high-level laws. Colombia has several mechanisms that aim to make territorial organisation more effective and efficient: associations of departments, associations of metropolitan areas, municipal associations, administrative and planning regions (RAPs), planning and management regions (RPGs), special planning and administrative regions (RAPEs), provinces, associations of departments and metropolitan areas, and, more, recently the metropolitan region. Currently, 86 associative schemes are in place, including 56 municipal associations. About 70% of these associative schemes have been formed around environmental policy goals.
Municipal associations are the easiest way for municipalities to join forces for common objectives and some have been operating for more than 25 years. They obey a genuine motivation to co-operate as 90% of municipalities in the country are too small (less than 10 000 inhabitants) and, alone, they cannot afford meaningful investments (OECD, 2016[17]). Municipal associations can be formed without public consultation and municipalities from different departments can join the same association. This is a more flexible association scheme than metropolitan areas for example, which are more complex and rigid. There are also territorial integration committees aimed at promoting dialogue among municipalities. However, they are not having the expected result as municipalities do not communicate systematically due to political differences or they focus on their own priorities.
One way of reinforcing the mechanisms for territorial co-operation in Colombia is to carry out checks on co-operation entities. These checks could be of an administrative, legal and financial nature as is the case in countries such as Austria, the Czech Republic, Finland, France, Germany, the Netherlands and Sweden. This should not be regarded as a violation of municipal autonomy but only as a method to ensure that the use of resources transferred from national government are being used properly. However, Colombia may wish to conduct checks that look into the effectiveness of action. In Germany, for example, the national government conducts legal and technical supervision to verify that bodies are carrying out their assigned duties lawfully and appropriately. In Austria and Norway, checks are conducted to verify the effectiveness in each type of inter-municipal co-operation covered by legislation. Alternatively, Colombia may explore adapting the Welsh corporate joint committees as a formal inter-municipal co-operative mechanism to support municipalities in urban planning and policy implementation (OECD, 2020[21]).
Metropolitan governance is key to invest at the right scale
Metropolitan governance is gaining significance
Metropolitan governance is of fundamental importance for Colombia due to the relevant role cities play in the economy and existence, according to the System of Cities, of 18 functional areas that account for 81% of the population of the System of Cities (Gobierno de Colombia, 2014[10]). Moreover, there is a growing number of urban residents in cities (i.e. Bogotá, D.C., Cali and Medellín) and their suburban areas, emigrated from rural areas largely due to armed conflict (see Chapter 1). This demographic phenomenon creates additional pressure on cities and their neighbouring municipalities to provide sufficient and high-quality public services to a growing population. Metropolitan governance arrangements allow municipalities to join forces and resources for a more efficient response to urban challenges and demands.
In Colombia, metropolitan governance arrangements are not unknown as, in 1968, authorities created the first metropolitan area in the Valle de Aburrá with Medellín as its core city (Box 5.3). The LOOT created the Territorial Organisation Commission (COT) responsible for the definition of territorial organisation policy, but its basic work instrument, the General Policy for Territorial Management (Polítical General de Ordenamiento Territorial, PGOT), is yet to be approved.
Promoting metropolitan governance is gaining importance in Colombia. Municipalities classified as functional according to CONPES 3819 on the System of Cities, used different mechanisms to strengthen metropolitan governance to achieve better urbanisation and increase competitiveness. According to the OECD Survey on Urban Policy in Colombia 2021, 23 of the 72 municipalities that answer the governance section of the survey are located in a metropolitan area. Figure 5.3 shows that joint elaboration of development and investment projects between urban and rural areas, co-ordinating public service delivery and having regular meetings among municipal leaders are the mechanisms that they used the most to promote urban development at the metropolitan level. The use of these mechanisms could be part of the activities undertaken within the framework of a municipal associative scheme. Metropolitan land use planning (Plan Estratégico Metropolitano de Ordenamiento Territorial, PEMOT) also appears to be an important mechanism for metropolitan governance driven by the need for spatial and land use planning to keep pace with changing functional territorial boundaries. This is particularly important for Colombia as it has a polycentric urban structure where the borders of local jurisdictions do not correspond to urban form and the patterns of residents’ daily activities.
Box 5.3. The Metropolitan Area of the Valle de Aburrá and the Metropolitan Region of Bogotá-Bucaramanga
The Metropolitan Area of the Valle de Aburrá (AMVA) was created in 1980. It is the most consolidated metropolitan entity in the country and second-largest agglomeration in Colombia with a population of 3.9 million inhabitants. It is formed by ten municipalities (Barbosa, Bello, Caldas, Copacabana, Envigado, Girardota, Itaguí, La Estrella, Sabaneta and Medellín as its core city). According to the statutes of AMVA, the metropolitan area has three main planning instruments: the Integral Metropolitan Development Plan, the Metropolitan Strategic Plan for Land Use Planning and the Metropolitan Management Plan. AMVA has developed the first Metropolitan Strategic Plan of Territorial Organisation in Colombia. It is the environmental and transport authority in the area and co‑ordinates land use planning in the metropolitan territory through an integrated development plan. AMVA has a public transport network that links all municipalities in the area. The Integrated Transport System of the Valle de Aburrá (SITVA) includes a metro, trams, metrocable as well as an extensive bus and bicycle network.
The metropolitan board, composed of the ten mayors of the Valle de Aburrá, approved the Management Plan 2020-2023 “Sustainable Future”. Its objective is to move towards a smart metropolis, with actions for a sustainable development focus on innovation and the use of information and communication technology (ICT) to increase people’s quality of life. The plan is structured around three axes – environmental sustainability, territorial synergies and physical and virtual connectivity – and six main components – information, innovation, knowledge, communications, technology and mobility. During the four-year period, authorities plan to invest COP 1.75 billion in 27 investment programmes such as mitigation and adaptation to climate variability, intelligent disaster risk management, intelligent management of surface and underground water resources, sustainable economic development, strengthening of open and digital institutions, inclusive social management, etc.
The Metropolitan Region of Bogotá-Cundinamarca (RMBC) is an associative model created through a constitutional reform in 2020. It encompasses the Capital District (Bogotá, D.C.), the Governorate of Cundinamarca and its municipalities. It is a co-ordination and complementarity mechanism to facilitate efficient use of public resources between public and private actors in the environmental, territorial and economic sectors, as well as public transport and mobility and public service delivery. The creation of the RMBC allows Bogota, D.C. and the Governorate of Cundinamarca to conduct joint planning of public policies on mobility, safety, public service delivery, budget management and sustainable development.
The RMBC concentrates 20% of the national population (11 million inhabitants) and contributes 32% to the country’s gross domestic product (GDP). It has a high level of GDP per capita (USD 9 274, compared to the national average of USD 2 600). There are 2.6 million daily trips between Bogotá, D.C. and Cundinamarca, and commuting may take up to 3.5 hours both ways per day. The Cundinamarca region has 190 protected areas. Bogotá, D.C. and 46 municipalities of Cundinamarca share the Bogotá River basin but there is a lack of an efficient waste water treatment system. About 87% of the food production in Cundinamarca is sold in Bogotá, D.C. It is expected that the creation of the RMBC will facilitate the planning and implementation of public transport infrastructure while reducing the public transport costs for passengers. The RMBC will create the co-ordination tools to facilitate the adaptation and mitigation of climate change while promoting a circular economy, with an emphasis on reducing food waste. The RMBC seeks to improve the planning of water supply and make more efficient use of the Bogota River basin. The region seeks to increase its capacity through a model of communication, co-ordination and co-operation that facilitates decision-making among the different levels of government.
Source: For AMVA: AMVA (n.d.[22]), Homepage, www.metropol.gov.co/ (accessed in August 2021); Junta Metropolitana del Valle de Aburrá (2013[23]), “Acuerdo Metropolitanao No. 10 Por medio del cual se modifican y adoptan los estatutos del Area Metropolitana del Valle de Aburrá”, https://www.metropol.gov.co/acuerdosmetropolitanos/2013/ACUERDO%2010.pdf; for the RMBC: RMBC (n.d.[24]), Cartilla de la Región Metropolitana Bogotá-Cundinamarca, www.regionmetropolitana.com/cartilla-region-metropolitana; Portafolio (2019[25]), “Producto interno bruto de Bogotá supera al de tres países de la region”, www.portafolio.co/economia/producto-interno-bruto-de-bogota-supera-al-de-tres-paises-de-la-region-532324.
Figure 5.3. Mechanisms to promote metropolitan governance in Colombia, n=23
Note: Answers to question “Q.6.2. If your municipality is in a metropolitan area, how do you promote metropolitan governance to improve the quality of urbanisation and competitiveness?”. Municipalities were invited to select all possible options.
Source: OECD Survey on Urban Policy in Colombia 2021, conducted with the support of the MVCT and AsoCapitales.
The most recent effort to enhance the intermediate level and contribute to the decentralisation process has been the enactment of the Metropolitan Areas Law (Ley de Áreas Metropolitanas) in 2013. The law provides metropolitan areas with a political, fiscal and administrative regime (Gobierno de Colombia, 2013[26]). It lays the ground for addressing challenges of large cities such as solid waste management, inter-municipal transport and harmonisation of the POTs across municipalities in the metropolitan area. The law empowers metropolitan areas to set and implement:
An action plan for their metropolitan development, called Comprehensive Metropolitan Development Plan (Plan Integral de Desarrollo Metropolitano), which provides a long-term vision for metropolitan development and common objectives for sustainable development among the different municipalities.
A Strategic Plan for Metropolitan Territorial Organisation (Plan Estratégico Metropolitano de Ordenamiento Territorial), which sets the strategy for managing the metropolitan territory on issues such as water management, public transport, metropolitan infrastructure, land use management, social housing and rural and suburban organisation.
An enhanced decentralisation process, the legislation that defines co-ordination and collaboration mechanisms among municipalities, and a definition of responsibilities for urban development across levels of government provide Colombia with a solid ground for a metropolitan governance framework. Municipalities have access to mechanisms and tools for dialogue among peers, co-ordinating policy and planning and building economies of scale while respecting the autonomy of each other. Moreover, since metropolitan areas focus on transport and the environment, they can also strengthen their co-operation around concrete and tangible projects.
Although the mission for the elaboration of the System of Cities identified 18 agglomerations of supramunicipal nature, there are only six metropolitan areas (Barranquilla, Bucaramanga, Centro Occidente, Cúcuta, Valle de Aburrá and Valledupar) and three agglomerations2 (Cali, Cartagena and Manizales). The reason there are not more metropolitan areas as an associative scheme, even if not formalised, is that it is compulsory to hold a public consultation with strong citizen engagement in order to create a metropolitan area. Even though some mayors are interested in setting up a metropolitan area, they have not been able to organise the public consultation due to low levels of participation.
Metropolitan areas have authority over issues related to transport and the environment, which gives them a higher hierarchical level in comparison to other forms of association, such as municipal associations. They have the obligation to issue a metropolitan development plan and a metropolitan land use plan (PEMOT), both for a period of 12 years, which are approved by the metropolitan board (junta metropolitana), which is the governing body of a metropolitan area composed of the mayors of the member municipalities and chaired by the mayor of the core municipality. Those plans provide guidance to the municipalities that are part of a metropolitan area regarding service delivery and infrastructure. In some cases, the core municipality (municipio núcleo) conducts investments in smaller municipalities as they tend to have more resources. These investments are generally in public works (i.e. parks, gardens) and infrastructure (i.e. schools) as this in return contributes to well-being in the municipality where investment was generated and also helps to limit immigration to the core municipality.
Although metropolitan areas in Colombia may seem to have a solid governance arrangement, in reality, four main weaknesses hamper their consolidation:
A first critical problem is the predominance of one municipality over another, in particular that of the core municipality (municipio núcleo). In the Metropolitan Area of the Valle de Aburrá, for example, 80% of the resources come from the municipality of Medellín (IEU, 2020[27]). According to the Statute of the Metropolitan Area of the Valle de Aburrá, each member municipality has to decide the sources and number of resources that will be transferred to the metropolitan area (Junta Metropolitana del Valle de Aburrá, 2013[23]). This arrangement, although fair regarding the possibilities of each municipality, could potentially give the most affluent municipalities more influence than others over the Strategic Plan of Metropolitan Development, the budget and other decisions. To avoid this, regulation on the distribution of contributions and decision-making should be enacted by the national government in consultation with metropolitan and departmental authorities.
A second problem is the financing of metropolitan areas. The Metropolitan Areas Law establishes the sources of funding that would allow metropolitan areas to fulfil their duties. Two main sources of funding are the surcharge on the appraisal cadastral property and a percentage of central government transfers for the activities that have a metropolitan character. However, the municipal cadastre is outdated in most municipalities and the share of transfers is decided by the municipalities that largely rely on transfers for their financing, then the resources transferred to the metropolitan area are variable and insufficient to cover their functions. Other sources of funding include: contributions and fees for the use of renewable natural resources, land value capture mechanisms, transport fees, charges, fines or permits; and the resources allocated in national, departmental, district or municipal budgets for metropolitan areas (Gobierno de Colombia, 2013[28]). However, none of these sources can provide budget certainty or secure substantial financing to carry out metropolitan infrastructure projects. Metropolitan areas seem to have more responsibilities than resources to meet them. For metropolitan areas to meet their responsibilities, their resources should cover daily administration, operational costs of the execution of plans and projects, and capital investment (construction of infrastructure). Moreover, no taxes are used to finance metropolitan areas to meet their responsibilities such as the elaboration of metropolitan development plan and the metropolitan land use plan, the development of metropolitan housing programmes, the creation of real estate banks for land management, the exercise of the function of public transport authority, participation in public service delivery, etc. (Gobierno de Colombia, 2013[28]). Although metropolitan areas have a large economic base, they have a strong dependence on central transfers. This is because of the highly constrained fiscal autonomy of municipalities (see below). This reliance on central transfers undermines local autonomy and local accountability. The central government’s grants and transfers are earmarked and do not consider the specific needs of metropolitan areas in terms of infrastructure for transport, water, sanitation and welfare.
A third problem is a lack of co-ordination of different land use plans at different scales for the same territory: the departmental land use plan ((planes de ordenamiento departamental, POD), the metropolitan land use plan and the municipal land use plan (POT), which have different functions, scales and scope. The metropolitan and municipal plans tend to overlap and most of the municipalities within metropolitan areas struggle with technical and financial limitations to update their POTs. Moreover, even if municipal associations or metropolitan areas try to promote land use objectives that could benefit all, if they are not included in the municipal POTs, then they cannot be realised. The reason is that, despite the existence of territorial management guidelines, municipalities are the ultimate authority that decides on land use.
A fourth problem has to do with the real power of metropolitan areas. Even though the metropolitan areas are entities for strategic planning, they have no binding power and many municipalities are not even aware of their existence. This leads to situations in which the strategic planning of a metropolitan area and the management of individual municipalities go in different directions. It may be argued that the origin of this problem is that there is an exacerbated municipalism in Colombia, in which municipal mayors take little interest in the situation of the surrounding area of their municipality and do not fully understand the importance of associative schemes such as metropolitan areas (IEU, 2020[27]). Municipalities are expected to solve problems such as mobility environment, infrastructure, education, housing, among others; but those are issues that exceed municipal capacities and require a larger view.
The metropolitan region scheme as a horizontal co-ordination mechanism for the capital city
In 2020, the constitution was amended to create the Metropolitan Region of Bogotá-Cundinamarca (RMBC), the Colombian authorities’ latest attempt to empower the socio-economic development of the country’s economic engine where the largest share of the national population lives (Box 5.3). For more than 40 years, the capital city Bogotá, D.C., had looked for a multi-level governance scheme but political differences among regional leaders prevented the design of such a scheme. Since the Metropolitan Areas Law does not envisage the creation of a metropolitan area in the Bogotá-Region, the Colombian congress created the new entity of “metropolitan region”. There are four main differences between the metropolitan region and the metropolitan area:
First, while a metropolitan area promotes the integration of municipalities into a core municipality (municipio núcleo), the metropolitan region does not favour one municipality over another and does not authorise the annexation of municipalities.
Second, while a metropolitan area has a metropolitan board (junta metropolitana) as the highest governing body, in which the core municipality has veto power, the highest authority in the metropolitan region is the regional council (consejo regional), where all municipalities participate on an equal footing, regardless of their economic power or population size.
Third, while the metropolitan area focuses on predominantly urban and conurbation issues, the metropolitan region embraces a wider scope of territorial, environmental, social and economic issues related to Bogotá, D.C., and the municipalities of the department of Cundinamarca.
Fourth, while the metropolitan area includes only the core municipality and neighbouring municipalities, the metropolitan region includes the Capital District (Bogotá), the Governorate of Cundinamarca and the municipalities of the department of Cundinamarca.3
The RMBC scheme brings the mayor of Bogotá, D.C., and the governor of the department of Cundinamarca at the same level while eliminating the entity of “core municipality” (municipio núcleo) that prevails in metropolitan areas. Unlike in municipal associations or metropolitan areas, there is no risk of the annexation of municipalities by the core municipality, which is why there was no need for public consultation to create the RMBC. The metropolitan region does not have a fixed geographic area, which leaves the door open to other municipalities to join the RMBC. There are currently 66 municipalities from the department of Cundinamarca that could potentially join the metropolitan region. The RMBC aspires at least to be a transport authority to generate infrastructure projects but it will not be an environmental authority. The proponents of the metropolitan region expect the national government to include the RMBC in the national budget to ensure it has a secure source of funding as it contributes to 35% of the national GDP and accommodates 20% of the national population.
The success of the RMBC could inspire similar governance arrangements in other urban agglomerations in Colombia. However, the consolidation of the RMBC faces a number of challenges. Since the discussion of the constitutional reform that gave birth to the RMBC largely took place in congress without citizen engagement, it will need to provide evidence that the metropolitan region is responding effectively to citizens’ concerns regarding land use, public services, mobility and environment (Galvis Gómez, 2020[29]). Moreover, the RMBC needs to ensure that its creation is not just for the benefit of the Capital District (Bogotá) to the detriment of the municipalities of Cundinamarca. To this end, national and subnational authorities need to find mechanisms to integrate the poorest and marginalised municipalities into the administrative structure and bridge the gap between rich and poor municipalities in the region. The RMBC will need to facilitate citizens’ participation in planning and decision-making processes to ensure that there is no primacy of one municipality over another and that decisions respond to real local needs. Moreover, the RMBC needs to protect the land used for food production and leverage land use to achieve the SDGs. Finally, another challenge is to endow the RMBC with the financial resources to implement programmes and projects that have an impact on the territory. This is of critical importance as metropolitan areas in Colombia lack reliable sources of funding and financing to cover their needs.
Improving metropolitan governance to underpin urban policy
The experience of OECD countries suggests that building compact, connected, clean and inclusive cities, as is the spirit of Colombia’s System of Cities, requires strong horizontal co-ordination at the subnational level. Colombia has a sound basis to improve and strengthen its horizontal co-ordination mechanisms. It has accumulated enough experience on how mechanisms for municipal co-operation work. Its practices and structures are largely aligned with the OECD Principles on Urban Policy. In particular, Principle 2 suggests:
“[a]dapt[ing] policy action to the place where people live and work by: promoting flexible and collaborative territorial governance and policy beyond administrative perimeters where appropriate, by supporting a functional urban area approach (cities and their commuting zones); adapting development strategies and public service delivery to the diversity of urban scales, ranging from neighbourhoods and intermediary cities all the way to metropolitan areas, large cities and megaregions…” (OECD, 2019, p. 14[30]).
Despite this progress, Colombia still needs to adjust some aspects of its governance arrangements to make them fit to support the implementation of local plans and strategies derived from the NUP. The supramunicipal level is crowded but weak. While some municipalities invest and deliver services jointly, several municipalities still prioritise their local objectives rather than those of the functional area. Financing remains uncertain and insufficient for joint investment ventures. Therefore, the following recommendations aim at supporting Colombia to revamp its existing structures for municipal co-operation:
Acknowledge the interdependence of policy sectors (e.g. housing, transport, land use, infrastructure, leisure, etc.) in inter-municipal or metropolitan planning and adopt an integrated policy approach. In line with the OECD Principles on Urban Policy, Colombia could strive to set the incentives to align and integrate sectoral policies to promote development. Clear messages must be sent from the central government on the importance of adopting integrated approaches to pursue the System of Cities aim of building compact, connected, clean and inclusive cities. Metropolitan areas in Colombia assume leadership on environment and transport but these two policy sectors have a considerable impact on and depend on others such as housing, land use, labour markets. For example, the experience of Greater Vancouver, Canada, suggests that to plan public transport, it is essential to plan for land use and housing and that providing affordable housing requires considering transport and land use policies (Huerta Melchor and Lembcke, 2020[31]). Even if Colombian metropolitan areas have authority for transport planning and environment, they should ensure that the design and implementation of land use, transport and housing policies are highly co-ordinated and mutually reinforcing. Moreover, in metropolitan areas (and regions) as well in the large agglomerations, the management of land requires a co-ordinated approach to contentious issues: regional transport investments, the location of industrial areas and the amount of housing that needs to be developed to satisfy demand. Metropolitan areas will have to ensure that spatial and land use planning keep pace with changing territorial boundaries.
Define an organising vision around multi-sectoral, cross-cutting strategies to guide municipal co-operation. There is little evidence that municipal associations in Colombia have a long-term strategic vision, as they generally seem to work around short-term investments and electoral cycles. A long-term vision should be devised and implemented by all municipalities in the association or metropolitan area (or region) to achieve more effective and coherent policy outcomes. Municipalities in Colombia will need to establish linkages between urban development policy and other cross-cutting objectives such as adaptation to climate change and economic growth. Departments and municipal associations should have a role in ensuring an open, clear and transparent process of policy making and that cities create a strategic vision of future urban development rather than focusing on separate sectoral programmes. The NUP should foster an understanding of cross-cutting policy issues and their importance in municipal urban development to try to obtain political support from municipal authorities.
Build on existing institutions of governance. As already mentioned, Colombia has a diversity of institutional arrangements among which municipalities can choose the model that best fits their needs, as well as those set in the LOOT (Gobierno de Colombia, 2011[11]). This variety of possible schemes is important as one single model may not be fit for all purposes. However, it is important to give time to the existing mechanisms of co-operation to mature and evolve rather than continue creating more. Experience suggests that building on existing governance mechanisms of co‑operation and co-ordination facilitates the development of a more holistic, multi-sectoral approach as key actors have already worked together (OECD, 2012[14]).
Revamp the role of departments as promoters of regional integration. The OECD had already recommended that departments should be given a clearer role in the promotion of regional integration through investment projects, strengthening their mandate to incentivise regional co‑operation for investment projects as technical support or political facilitator (OECD, 2016[17]). The role of departments could be enhanced by having a more active role in projects with cross-jurisdictional co‑operation.
Address the specific needs of the RMBC in the NUP. As the economic engine of the country, the RMBC has a primary role in driving the competitiveness of the country but it has a fragile legal situation and weak capacity. The city of Bogotá, D.C., has recently published a proposal for a new POT (Plan de Ordenamiento Territorial: Bogotá Reverdece 2022-2035),4 which highlights the need to promote associative mechanisms for the joint development of investment projects in the framework of the RMBC; it does not, however, provide further details on such associations. As people flee to the suburbs, congestion increases and related costs rise for the city, commuters and companies. Plans to expand and improve the quality and integration of public transport in the RMBC offer an important solution but public transport is not addressed in the new Bogotá POT under the regional metropolitan framework. The new NUP could provide the basis for strengthening the RMBC by promoting strategic and land use planning and investment at the metropolitan level in the region. Transport could be given priority to expand and improve the integration of the RMBC. The RMBC could benefit from a two-track strategy based on bringing not only jobs to people but also people to jobs.
Adopt strong and reliable instruments for monitoring and evaluation of continuous improvement of metropolitan issues. OECD country experience suggests that it is important to implement a long-term process of monitoring and evaluation to create and sustain credibility for reform based on tangible evidence (OECD, 2015[32]). The reason is that metropolitan areas continue to evolve and even governance structures that used to function well may eventually need to be adapted. Metropolitan areas (and regions) in Colombia could adopt a set of tools to ensure obtaining continuous feedback from citizens, academic experts and the private sector. For example, the metropolitan area of Toronto, Canada, has accumulated experience in collecting feedback from different actors. The Toronto City Summit Alliance is a multi-sector coalition working to meet regional challenges such as affordable housing, transport, infrastructure and immigrant integration. The city summit acts as a source of information, ideas, initiatives and as a neutral convener. While the main feedback tool is the summit that takes place every four years to drive collective action on key metropolitan issues, citizens can also contact the city summit with proposals at any time.5
Vertical co-ordination across levels of government to align policies to the NUP
Vertical co-ordination across levels of government in Colombia remains fragile despite efforts to strengthen it. A key limitation is the overlapping competencies across levels of government and the multiple plans territorial authorities must produce. For example, municipalities, districts, metropolitan areas and departments elaborate POTs that need to be co-ordinated but, since municipalities make the final decision on how land is used within its territory, it may not always be compatible with higher-level plans. There are no mechanisms for follow-up and evaluation of the different urban development plans and it is therefore difficult to analyse their impact on higher national urban development objectives.
The National Planning Department (DNP) is in charge of articulating national and territorial planning, co‑ordinating policy among sectors and across government levels as well as supporting the capacity enhancement of subnational governments. Since it acts as the technical secretariat of the COT, it has a prominent role in discussions on territorial organisation with governments of different levels. A key issue to consider is whether its decisions are binding and compulsory for all actors in urban and territorial development.
The role of departments in vertical co-ordination could be enhanced
According to the 1991 Constitution and LOOT, departments – the intermediate governmental level in Colombia’s territorial structure – are supposed to assume the role of intermediaries between the national government and the municipalities. They are also supposed to be key players for regional development as they have more technical and administrative capacity than the vast majority of municipalities. They share competencies with municipalities in several policy issues and provide financial, administrative and technical assistance to municipalities. However, departments have limited resources to meet their responsibilities and properly support municipalities. For example, while municipal tax revenues as a share of GDP grew from 0.9% in 1990 to 2.4% in 2017, those of departments fell from 1% to 0.8% in the same period (Pérez, Espinosa and Londoño, 2019[33]). Although they receive a considerable share of the royalties (see below), they do not decide on the execution of all projects funded through those resources.
The OECD had already recommended strengthening the role of departments as integrators and links between municipalities and the national government (OECD, 2016[17]). The reason is that departments are key partners for municipalities in terms of technical, administrative and financial support and they often substitute weak municipalities and co-ordinate regional projects. Departments have a key role in setting orientations for regional development, they are key players in the royalties system and co‑ordinate Contratos Plan (contract plans). Thus, they could take on a more proactive role to support critical projects with cross-jurisdictional co-operation and in the management of royalties. Their mandate to incentivise regional co‑operation for investment projects should be strengthened. The departmental land use plans (PODs) should help to orient municipal land use plans on regional issues. Co-ordination between PODs and municipal POTs remains a challenge as it is not mandatory. The MVCT could issue regulations to strengthen the role of PODs as a reference point for POTs.
Municipal associations as platforms for dialogue across levels of government
Municipalities are the beneficiaries of decentralisation but they cannot catalyse its benefits partly because of the lack of order in the intermediate level of government (IEU, 2020[27]). Colombia has been creating different territorial figures at the intermediate level with the purpose of facilitating co-ordination among governments at the same level and across levels of government. The intermediate level is composed of departments, metropolitan areas, municipal associations, administrative planning regions, associations of departments and associations of metropolitan areas. The problem is that they lack clear competencies and, in many cases, funding. These figures should be the link between national and municipal governments but the crowded landscape at the intermediate level is hindering that co-ordination. The co-existence of these various associative schemes highlights a landscape where the intermediate level is crowded with relatively weak administrative and territorial organisational figures without clear competencies and the (financial) resources to exercise them. Colombia has been experimenting with the adoption of these associative schemes since the enactment of the LOOT in 2011 but they have not matured and need strengthening, preventing the accumulation of experience to refine the schemes, and do not allow for consolidating the decentralisation process. The lack of (financial) incentives and competency for designing and implementing regionally co-ordinated investment and the possibility on incurring potentially costly co-ordination processes have contributed to the limited use of the associative schemes (OECD, 2016[17]).
Four main associations seek to represent the interests of subnational governments and foster co-ordination with the national government and among their members: i) the National Federation of Departments (Federación Nacional de Departamentos, FND); ii) the Colombian Municipalities Federation (Federación Colombiana de Municipios, FCM); iii) the Colombian Association of Capital Cities (AsoCapitales); and iv) the Colombian Association of Metropolitan Areas (Asociación Colombiana de Áreas Metropolinatas). The FCM brings together almost all municipalities in Colombia and the central government consults it on all matters impacting municipalities. It constitutes a platform for the exchange of information and experiences among municipalities.6 All these associations and their interactions with the national government contribute to aligning municipal policies with the NUP framework. During the preparation of the current NUP and the groundwork for the formulation of the new urban policy, there has been close dialogue between the associations and the MVCT. For example, the creation of AsoCapitales in 2012 opened a platform for feedback and received proposals for the strengthening of the conclusions of the task force that elaborated the System of Cities. Similarly, other OECD countries have a co‑ordinating ministry or agency or platforms for dialogue between national and subnational governments for NUP (Box 5.4). Some OECD countries such as Australia and the Czech Republic have developed a multi-sector, multi-level co-ordination mechanism to engage national sectoral ministries and subnational governments.
Box 5.4. Building adequate co-ordination across levels of government in OECD countries – Selected examples
In Australia, the Council of Australian Governments (COAG) is the main forum for the development and implementation of inter-jurisdictional policy. Its role is to promote policy reforms that are of national significance, or which need co-ordinated action by all Australian governments. The prime minister, state premiers and chief territory ministers and the president of the Australian Local Government Association are members of the COAG.
The Czech Republic created the National Permanent Conference to serve as a high-level communication platform where different ministries, managing authorities, regions, cities and territorial partners participate. Its main goal is to address the territorial dimension of EU funds and regional, urban and rural development aspects.
In Italy, political dialogue and vertical co-ordination between the regional and national governments is ensured through the State-Region Conference, a permanent negotiating arena between central and regional authorities.
In Israel, in 2019, the Planning Administration called for proposals to local authorities and regional planning bureaus to identify and submit proposals for areas suitable for urban regeneration. Seventy local authorities submitted over 100 proposals which are assessed based on a set of quality-driven criteria, such as the project’s location, potential to impact on its surrounding area and improve the public sphere, and the engagement of the local community and local authority. The selected areas will be re-planned through policy documents, outline plans and strategic regeneration plans. Israel’s Planning Administration seeks to align subnational planning with national planning goals through technical support to subnational governments.
In New Zealand, the Local Government Commission is an independent, permanent body for inquiry into local reform created by the Local Government Act in 2002, specifically with the aim of building a relationship across party lines in the context of multi-level governance needs.
In 2015, Portugal established the Council for Territorial Dialogue chaired by the prime minister and with the representation of central and local governments, to facilitate continuing dialogue on important policy and programme issues. Beyond permanent fora of inter-governmental consultation, ad hoc committees and commissions also serve to facilitate inter-governmental and civil society dialogue on some intractable issues.
Source: For the Czech Republic and Israel: OECD/UN-Habitat/UNOPS (2021[2]), Global State of National Urban Policy 2021: Achieving Sustainable Development Goals and Delivering Climate Action, https://dx.doi.org/10.1787/96eee083-en; for Australia and Italy: OECD (2016[17]), Making the Most of Public Investment in Colombia: Working Effectively across Levels of Government, https://dx.doi.org/10.1787/9789264265288-en; OECD (2019[34]), Making Decentralisation Work: A Handbook for Policy-Makers, https://dx.doi.org/10.1787/g2g9faa7-en.
Co-ordination among national and subnational governments has given a new impetus during the COVID‑19 crisis across OECD countries to ensure an effective response. The crisis showed that “…where subnational governments operated with high degrees of autonomy, policy responses are more likely to be fragmented” (OECD, 2021, p. 89[35]). This means that when autonomy is not accompanied by co‑ordination, subsidiarity and concurrence may weaken its effects and the decentralisation process itself. Weak co-ordination and communication across levels of government created the risk of operating with one-size-fits-all measures that may not address local needs, particularly in large and diverse countries like Colombia. Associations of regional and local governments are playing a critical role in supporting vertical co-ordination to manage the COVID-19 crisis. They are interlocutors between national and subnational governments, and they identify solutions and support the implementation of emergency measures. The OECD has recommended that co-ordination bodies established during the crisis should continue to be mobilised to co-ordinate and communicate responses and support recovery strategies (OECD, 2021[35]). Moreover, Colombia, like other OECD countries, could adapt existing multi-level governance frameworks and processes to direct public investment at subnational governments and support a prompter adoption of recovery plans (OECD, 2021[35]). Colombia’s national government could continue using the vertical co‑ordination displayed during the crisis to support the planning and execution of the recovery strategy and NUPs. Box 5.5 provides some examples of the mechanisms for vertical co‑ordination introduced by some OECD countries to enhance their response capacity to the COVID-19 crisis and that may support recovery strategies.
Box 5.5. Responding to the COVID-19 crisis through vertical co-ordination in selected OECD countries
To underpin its health response to the COVID-19 crisis, Canada developed a “whole-of-government action” based on seven guiding principles including collaboration. These principles call on all levels of government and stakeholders to work in partnership to generate an effective and coherent response. They build on lessons learned from past events such as the 2003 SARS outbreak.
In France, the Cazeneuve report promoted the creation of an observatory for the follow-up of the crisis and its impact on local finances based on a real-time sharing (updated every two months) of financial statements and a common methodology for calculating the costs of the crisis.
In Sweden, to deal with the COVID-19 outbreak, the Public Health Agency of Sweden relies on County Administrative Boards for information on the specific challenges and conditions prevailing in each area. The boards are responsible for co‑ordinating the state, regions and municipalities in terms of infection control aspects and for ensuring that important societal functions are maintained in the country. On 1 July 2020, the Swedish government established a Corona Commission, responsible for evaluating COVID‐19 actions by the government, government agencies, regions and municipalities and for comparing the Swedish strategy to that of other countries.
In the United Kingdom (UK), the Scottish government created a City Centre Recovery task force, led by the Economy Secretary and carried out through the Scottish Cities Alliance, a partnership between the Scottish government and Scotland’s seven cities, to improve multi-level and multi-stakeholder co‑ordination throughout the recovery.
Source: OECD (2021[35]), “The territorial impact of COVID-19. Managing the crisis and recovery across levels of government”, https://read.oecd-ilibrary.org/view/?ref=1095_1095253-immbk05xb7&title=The-territorial-impact-of-COVID-19-Managing-the-crisis-and-recovery-across-levels-of-government&_ga=2.103610951.677348836.1629894019-1211761618.1618842879.
Co-financing instruments as a tool for vertical co-ordination
Since the 2010s, Colombia introduced the contract plan (Contratos Plan) to co-ordinate investment more effectively across levels of government in a cross-sectoral manner. These contract plans, called Territorial Pacts (Pactos Territoriales) since 2018, are investment programmes that focus on improving connectivity and service delivery in lagging areas in key policy areas such as education, healthcare and sanitation. Territorial Pacts can be elaborated at the regional level (based on the nine regions featured in the National Development Plan), departmental level (for the departments of Chocó and La Guajira considered as a priority in the PND) and functional level (for the municipalities within functional urban areas). They were inspired by the French contrats de projets État-région. The French contracts provide for simultaneous preparation of all of the contracts across France and each contract lasts for seven years. The Colombian system has different timings (from three to eight years) and different territorial coverage. The new generation of Contratos Plan that started in 2014 has a specific focus on peace and post-conflict, which is why they are also called Contratos Paz as they were developed within the framework of Colombia’s post-peace development agenda. Like the first generation, they focused on road connectivity and service delivery but they also include long-term infrastructure projects.
The implementation of Territorial Pacts requires strong horizontal co-ordination among subnational governments and vertical co-ordination with the national government. Although these pacts have contributed to capacity building, infrastructure construction and strengthening trust across levels of government, some challenges remain. Projects managed through this instrument tend to be highly fragmented and lack sound technical analysis. The heavy bureaucracy that tends to slow down implementation, the fragmented nature of the projects, as well as deficiencies in project design affect their effectiveness. The timespan of each Territorial Pact varies and the fact that they do not necessarily match with the local development plan timeframe may be an advantage as this could ensure a certain continuity across mandates which last only four years. Box 5.6 provides an example of how the contract plan in the department of Cauca is financed and of its flagship projects.
Box 5.6. Contract Plan Cauca
The Contrato Plan Cauca is an example of a contract plan at the departmental level. Its objective is to articulate and co-ordinate the planning, management and financing capacities of the 42 participating municipalities to contribute to integral rural development with a territorial focus, the well-being of the communities, and conservation and sustainable use of the ecosystems of the department of Cauca. It was subscribed in 2013 for a ten-year period. It has an indicative budget of COP 1 333 million of which the national government will contribute 50% and the department and municipalities the other 50%. These resources are used for the development of 14 sectors grouped in 4 strategic priorities: i) integral rural development with a territorial approach; ii) social development; iii) productive development and tourism; and iv) infrastructure and environmental management.
By the end of June 2021, the contract plan had managed to secure COP 951 774 million which represents 71.4% of the total expected budget. The Contract Plan Cauca contemplates 135 investment projects of which 85 are concluded while 50 are still in progress. Some of the projects include the construction of hospitals, a university city, improvement of the infrastructure for water supply in the municipality of Puerto Tejada and the strengthening of education quality through the use of ICT across the department’s schools.
Source: DNP (2021[36]), Ficha Trimestral Contrato Plan Cauca (30/06/2021), https://colaboracion.dnp.gov.co/CDT/Contratos%20Plan/Contratos%20Plan/Fichas%20Trimestrales%20a%2030-06-2021/Ficha%20trimestral%20Contrato%20Plan%20Cauca%20corte%20junio%202021.pdf.
Colombia should continue to implement this instrument due to its value in co-ordinating investments. However, the instrument may need to undergo some adjustments to improve its efficiency and effectiveness. For example, it needs to focus on concrete investment projects with clear financing sources identified and stated in the contractual document. The OECD has already recommended that the elaboration process could be simplified, and the features of the contract could be harmonised and standardised, particularly regarding timing; the aim is to facilitate monitoring (OECD, 2016[17]). The managing authorities should be better identified, and departments should have a clearer role to co‑ordinate the process. A Territorial Pact, as Box 5.6 shows, has a large number of projects of different nature and sometimes it is not clear who the managing authority is. Finally, to improve implementation, penalties could be introduced when the objectives of the contracts are not achieved. The DNP issues quarterly reports on the progress made on every contract plan, stating the progress made in every single project and which could be used as a basis for accountability. The DNP could enhance its role as co-ordinator across national ministries to ensure that all key relevant bodies work together to implement the Territorial Pacts (OECD, 2016[17]).
Financing municipalities
A steady process of fiscal decentralisation
The enactment of the 1991 Constitution led to a radical change in fiscal relations across levels of government in Colombia. Subnational levels of government (departments and municipalities) received more responsibilities, particularly in areas of education, healthcare, housing, transport, water and sanitation. The decentralisation of responsibilities was accompanied by measures to increase local income through an increase in the amount of national tax revenue that is shared with subnational governments and the creation of some subnational taxes to provide local governments with their own sources of income. These reforms and measures have made Colombia the most decentralised unitary country in Latin America (Bousquet, Daude and de la Maisonneuve, 2015[37]; OECD, 2016[17]). As discussed above, the Organic Law of Territorial Organisation (LOOT) assigns different responsibilities to each level of government (Figure 5.2). However, the OECD has found that the responsibilities held by each level of government, specifically between departments and municipalities, are still somewhat unclear (Table 5.1) (OECD, 2014[20]). The reason is that Colombia appears to have a dual system of decentralised and delegated responsibilities, and most of the competencies are shared across all levels of government. This configuration requires efficient and effective co-ordination mechanisms to deliver such responsibilities. When compared to OECD countries, Colombia has a slightly lower level of fiscal decentralisation, considering spending, than the OECD averages, which were 40.2% of public expenditure and 16.2% of GDP in 2019 (Figure 5.4). When considering OECD unitary countries only, Colombia’s level of subnational government expenditure as a percentage of GDP (12.6%) is equivalent to countries such as the Czech Republic (11.8%), France (11.2%), Iceland (13%) and the Netherlands (12.9%) but well below countries such as Denmark (32.6%), Finland (21.9%), and Sweden 25.1%) (OECD, 2021[38]). Colombia is significantly ahead of other OECD unitary countries such as Chile, Greece, Hungary, Ireland, Israel, New Zealand, Portugal and Turkey, where local governments have limited competencies (Figure 5.4).
Figure 5.4. Subnational government expenditure as a percentage of GDP and public expenditure across OECD countries, 2019
Source: Elaborated based on OECD (2021[38]), Subnational Governments in OECD Countries: Key Data 2021 Edition, https://www.oecd.org/regional/multi-level-governance/OECD_SNG_Nuancier_2021.pdf (accessed on 26 August 2021).
Colombian subnational governments have limited spending autonomy
The spending autonomy of Colombian subnational governments is largely limited by the revenue sources (earmarked transfers). The revenue of Colombian subnational governments comes from three different sources: direct transfers from the central government (Sistema General de Participaciones, SGP), income from assets (royalties) (Sistema General de Regalías, SGR) and subnational taxes. The bulk of subnational revenues comes from direct transfers from the general budget, which are earmarked. They amounted to almost 60% of subnational governments’ revenue above the OECD average of 37.6% in 2019 (OECD, 2021[38]). They are earmarked and, in 2020, almost 60% of transfers went to education expenditure, 23% to health, 5% to water and 10% to general-purpose items such as culture, sports and investment.7 About 35% of transfers go to departments while 65% go to municipalities (OECD/UCLG, 2019[18]). The purpose of this system is to ensure that every Colombian citizen has access to basic services of comparable quality.
Regarding royalties, departments and municipalities affected by extractive activities (oil, gas, other natural resources), either as producers or providers of logistics, receive part of the royalty payments generated by business and the amount fluctuates year by year. These resources are administrated through different regional funds such as the Regional Development Fund and the Regional Compensation Fund. These resources can only be used for capital investment projects such as infrastructure (i.e. a hospital) but they cannot be used to pay for operation costs (i.e. the operation of the hospital). This rule seems logical as royalties are transitory one-off revenues that should be used to foster investment projects, these investments require higher maintenance expenditure from the national transfers putting additional pressure on subnational governments’ own limited resources. The central transfers and the royalties are two instruments that are making fiscal decentralisation imbalanced as subnational governments have wide-ranging competencies but limited spending autonomy as most expenses are earmarked (OECD, 2016[17]).
Colombian subnational governments also have revenues from local taxes and fees. In 2019, they represented 29.8%, well below the OECD average of 44.3% (OECD, 2021[38]). Subnational governments have limited taxation autonomy and several constraints over tax rates and bases. They have what is called “residual autonomy”, which means that subnational governments can set tariffs only within the parameters defined by law but are free to manage them according to their own needs and procedures. Municipalities obtain resources from around 20 different municipal taxes but 80% of tax receipts come from 3 of them: industry and commerce tax (ICA, 38% of municipal tax revenues), property tax (predial, 34%) and a gasoline surtax (around 7%) (OECD/UCLG, 2019[18]). Departments charge consumption taxes and vehicle tax. Property tax and industry and commerce tax are the main municipal taxes (34.4% and 36% of municipal taxes in 2019 respectively).8 In addition, municipalities receive a gasoline surcharge, which together with the 2 main taxes represents 32% of municipal income. For departments, taxes for consumption (i.e. wine, beer, tobacco) represent 27% of their total income.9 Figure 5.5 provides a comparative overview of the structure of Colombia’s subnational revenue with other OECD countries. It shows how much dependence subnational governments have on grants and subsidies from the central government, with almost 60% of subnational income coming from central government, well beyond the OECD average of 37.6% in 2019.
Borrowing is strictly regulated by prudential rules. Subnational governments debt in Colombia (20.7% of GDP) is below the OECD average (24.5% of GDP) (OECD/UCLG, 2019[18]). Since the 1991 decentralisation reform, subnational governments’ debt had increased, as responsibilities on education and health were decentralised without corresponding funding and subnational governments borrowed steadily to cover deficits. Therefore, the central government introduced fiscal discipline laws such as the Traffic Light Law (i.e. Ley de Semáforo) to correct imbalances. Local governments that were highly indebted were not allowed to borrow (red light), those with a green light were allowed and those with a yellow light had to request approval from the central government before borrowing.
The financing system of subnational governments has been called into question regarding its lack of flexibility and for not distinguishing between urban and rural areas. Since most of the resources are earmarked (transfers) or can only be spent in capital investments (royalties), subnational governments have a limited ability to define their expenditure based on their own specific priorities. Moreover, subnational governments are not entitled to create new taxes; they can only collect taxes specified by the central government. Only a few tax receipts can be freely disposed of (OECD, 2014[20]). Although revenues generated by royalties can be allocated freely, subnational governments must do so according to the rules set by the national government. However, they are generally used to provide basic services rather than to stimulate economic development. Therefore, subnational governments, in particular municipalities, have insufficient resources to improve broader urban development, for example, to improve mobility. Moreover, the current financial system does not prioritise or incentivise the ability of subnational governments to raise their own revenues.
Figure 5.5. Comparing Colombia’s structure of subnational revenue and OECD countries, 2019
Source: OECD (2021[38]), Subnational Governments in OECD Countries: Key Data 2021 Edition, https://www.oecd.org/regional/multi-level-governance/OECD_SNG_Nuancier_2021.pdf (accessed on 26 August 2021).
Subnational spending mostly goes to sectors for which expenditure is earmarked
In Colombia, subnational public expenditure represents one-third of total public expenditure in the country (OECD, 2014[20]). Municipalities represent approximately two-thirds of expenditure while departments represent one-third (OECD/UCLG, 2019[18]). Figure 5.6 shows the distribution of expenditure by sector in Colombia where education (35%), health (22%), general public services (13%) and economic affairs and transport (13%) have the highest share of investment. Given the central government’s high dependence on earmarked grants, it is no surprise that subnational spending goes predominantly to sectors for which expenditure is earmarked in the SGP. Funds cannot be used to cover any debt. Moreover, subnational governments have rather limited authority on where and how to spend since those resources are earmarked (OECD, 2016[17]).
Figure 5.6. Subnational expenditure in Colombia by sector, 2016
Source: OECD/UCLG (2019[18]) (2019), 2019 Report World Observatory on Subnational Government Finance and Investment - Key Findings, http://www.sng-wofi.org/publications/2019_SNG-WOFI_REPORT_Key_Findings.pdf (accessed on 28 August 2019).
An incomplete fiscal decentralisation process that affects the capacity for managing urbanisation
Urbanisation in Colombia has placed a huge burden on local administrations to finance and build urban infrastructure including roads, public transport systems and utilities such as water, sanitation, electricity and Internet provision. Building and maintaining a city’s infrastructure such as the public transport network requires considerable amounts of financial resources that no level of government alone can fully fund on its own. Even the newly created Bogotá-Cundinamarca Metropolitan Region lacks the necessary resources to invest in key infrastructure and requires support from the central government as its sources of funding are still being negotiated with the national government.
While the fiscal decentralisation process was intended to strengthen subnational governments’ capacity for meeting the needs of their residents, it remains unfinished. So far, local governments mostly serve as a vehicle for the central government to deliver services, which makes the “decentralisation” process rather a “deconcentration” reform that has limited the autonomy of departments and municipalities, both in terms of revenue and expenditure (OECD, 2014[20]).
The subnational fiscal framework does not allow for considering significant differences in development across territories and the specific needs of each local government as the rules are the same for all municipalities regardless of their own capacity.
Moreover, the system does not appear to encourage the effective use of local public finance. Local governments have the possibility of using a wide range of taxes and other instruments (i.e. land value capture instruments) to raise their revenues but these are not fully used due to the lack of technical capacity and technical complexities. It may also be the case that local authorities are reluctant to pay the political cost of increasing taxes, even if the latter is currently underused.
Central government transfers absorb operational expenditure since local governments have a limited capacity to raise their own revenues to cover them. Operation costs are often disregarded in the investment cycle; most SGR projects do not include operational costs compromising their long-term sustainability. Table 5.2 shows that while current expenditure amounts to 87.5%, direct investment is only 12.5%. This means that transfers are less and less used to fund basic public services. Some local authorities even use royalties to pay for projects that should have been financed by transfers (OECD, 2016[17]). The insufficient tax-raising power of subnational governments and the absence of significant efforts on the part of departments and municipalities to increase tax collection hinder the possibility to increase their own income that they can dispose of more freely. This is particularly problematic in small- and medium-sized cities with lower levels of population, resources and room for manoeuvre to increase tax collection. The more limited capacity of medium and small cities to use different sources of income provided by law and their limitations to update the cadastre for property tax hinders their income.
Table 5.2. Subnational government expenditure in Colombia, 2016
Source: OECD/UCLG (2019[18]) (2019), 2019 Report World Observatory on Subnational Government Finance and Investment - Key Findings, http://www.sng-wofi.org/publications/2019_SNG-WOFI_REPORT_Key_Findings.pdf (accessed on 28 August 2019).
The challenge for Colombia is to create the conditions and incentives for subnational governments to increase their own revenues to finance capital investments and participate in co-financing projects or arrangements for major infrastructure investments. In its earlier reviews on territorial development (OECD, 2014[20]) and public investment (OECD, 2016[17]) in Colombia, the OECD formulated a set of policy recommendations to improve and modernise the subnational public finance framework as part of the fiscal decentralisation process. Those recommendations still stand valid today as subnational governments continue to face serious constraints to raise revenue (Box 5.7). It may be noted that according to Box 5.87, the OECD recommends conducting a reform of the General Transfer System to make it more flexible and reduce earmarked transfers. This could generate concerns regarding those municipalities that still have low coverages of essential services as this could strip them from necessary resources. This is not the case. The recommendation calls for more flexibility so that municipalities have more freedom to decide on where to invest the transfers they receive; if they still need to continue investing in areas previously earmarked, they could still do so. However, more freedom could also require an overseeing body (department or national government) on how those resources are being used.
The national government may consider using the decentralisation process to enhance urban development objectives. For that purpose, the process of decentralisation must be reinforced to be effective and conducive to regional development. To this end, the national government may wish to use the OECD guidelines for effective decentralisation as a framework to design a new national urban development policy. These guidelines could support Colombia to enhance territorial co-operation and strengthen the fiscal capacity of municipal governments (Box 5.8). Moreover, Colombia may wish to develop a financing framework that allows joint investment between the national and subnational levels of government.10 This implies facilitating co-ordination across jurisdictions (municipalities) to design joint investment strategies and co-ordinate that investment with the national government, particularly in sectors such as infrastructure that require substantial investment. In addition, Colombia may wish to mutualise capital funding across subnational governments to facilitate access to finance and foster multi-sectoral investment strategies at the local level to benefit from complementarities across sectors.
Box 5.7. OECD recommendations to Colombia to reform the subnational financial framework
The following recommendations were formulated by the OECD to support Colombia in strengthening its fiscal decentralisation process and increase subnational governments’ capacity to finance investments according to their own needs.
Implement a reform of the General Transfer System. Reforms should focus on making the transfer system more flexible and reducing earmarked transfers. It should include an in-depth review of the criteria to allocate central government transfers in view of simplifying them and introducing new equalisation mechanisms. Connecting central government transfers with the royalty system and the general budget could help to anticipate the impact of capital expenditures on future current expenditures.
Implement a subnational tax reform. To increase subnational tax revenues, a review of the portfolio of taxes levied by subnational governments could be conducted as many small taxes do not bring considerable revenue but represent high operational costs. Options to increase the room for manoeuvre of subnational governments to manage taxes should be explored such as: offering leeway with respect to rates and bases; allowing subnational governments to decide on the allocation of their own taxation; reducing the number of earmarked taxes; and increasing user charges and fees by giving more freedom and flexibility to subnational governments, including metropolitan areas, in managing them. An inventory of financial and physical assets of subnational governments could be prepared to assess their potential in increasing local revenue. Updating the cadastral and land registries is paramount to improving tax bases, especially municipal property tax. Incentives to enhance tax collection should be considered.
Review the reallocation of responsibilities across levels of government. The aim should be to reduce ambiguity in responsibilities and inefficiencies in the provision of public services. The role of every level of government should be defined.
Promote a fiscal framework conducive to public investment. Since Colombia already has set rules for fiscal discipline at the subnational level, then it can use the OECD Principles for Effective Public Investment across Levels of Government to improve multi-level governance for public investment. For that, co-ordination across levels of government needs to be reinforced, the use of a medium-term fiscal framework for developing public investment needs to be strengthened, and new fiscal spaces to finance public investments must be created.
Improve the use of borrowing for investment. Colombia could consider loosening borrowing constraints. The central government could support local authorities in preparing borrowing plans, co-ordinated with investment strategies and financial plans.
Connect the different sources of funding to finance integrated investment strategies. The subnational government could prepare integrated investment strategies which include financial plans, financed by different funding sources.
Associate subnational government with the governance framework. To improve co‑ordination between central and subnational governments in managing public finance, subnational governments should be seen as partners in the discussion, definition and adoption of budgetary rules and targets as well as common objectives.
Ensure more integrity and transparency. This is essential to create relations based on trust and tackle corruption.
Source: OECD (2014[20]), OECD Territorial Reviews: Colombia 2014, https://dx.doi.org/10.1787/9789264224551-en; OECD (2016[17]), Making the Most of Public Investment in Colombia: Working Effectively across Levels of Government, https://dx.doi.org/10.1787/9789264265288-en.
Box 5.8. OECD guidelines for effective decentralisation
Guideline 1. Clarify the responsibilities assigned to different government levels. The way responsibilities are shared should be explicit, mutually understood and clear for all actors.
Guideline 2. Ensure that all responsibilities are sufficiently funded. Access to finance should be consistent with functional responsibilities.
Guideline 3. Strengthen subnational fiscal autonomy to enhance accountability. Subnational governments should have a certain degree of autonomy in the design and delivery of their public service responsibilities within the limits set by law.
Guideline 4. Support subnational capacity building. The central government should assess capacity challenges in the different regions on a regular basis and adapt policies to strengthen capacities to the various needs of territories.
Guideline 5. Build adequate co-ordination mechanisms across levels of government. Governance mechanisms should be established to manage joint responsibilities and create a culture of co‑operation and regular communication.
Guideline 6. Support cross-jurisdictional co-operation. The use of specific matching grants should be encouraged and inter-municipal and interregional co-operation, as well as metropolitan governance promoted.
Guideline 7. Strengthen innovative and experimental governance, and promote citizens’ engagement. Citizens should be empowered through access to information, participatory budgeting could be used.
Guideline 8. Allow and make the most of asymmetric decentralisation arrangements. This could be supported by effective vertical and horizontal co-ordination mechanisms and needs to go hand in hand with an effective equalisation system.
Guideline 9. Consistently improve transparency, enhance data collection and strengthen performance monitoring. Develop performance-monitoring systems to monitor decentralisation and regional development policies, which need to remain simple with a reasonable number of requirements/indicators.
Guideline 10. Strengthen national regional development policies and equalisation systems and reduce territorial disparities. Fiscal equalisation policies need to be accompanied by proactive regional development policies to offset the potential negative incentives of such systems.
Source: OECD (2019[34]), Making Decentralisation Work: A Handbook for Policy-Makers, https://dx.doi.org/10.1787/g2g9faa7-en.
Improving the use of land-based financing instruments
Colombia has two important land-based financing instruments to raise revenue to finance urban development by capturing the capital gains from property and land generated by public infrastructure projects: the contribución de valorización11 (betterment levy) and the participación en plusvalías (participation in capital gains).12 The former is a compulsory charge imposed on owners of a selected group of properties to defray, in whole or in part, the costs of improvements deemed to be of general benefit to the public and particularly the owners of such properties. Its value is fixed by each territorial entity as there is no predefined tariff. Betterment levies are used for financing infrastructure projects. The latter is a mechanism that seeks to recover part of the increased land values resulting from the changes in land use regulations, such as changes in zones, changes in the designation of the type of land, etc. The creation of these two instruments was inspired by the constitution, which stipulates that one of the state duties is to capture the added value generated by public actions. These two instruments are mostly used in large cities (i.e. Barranquilla, Bogotá, D.C., Bucaramanga and Cali) as they are too complex for the limited capacity of smaller- and medium-sized cities.
According to Law 388 of 1997 (Gobierno de Colombia, 1997[1]), all municipalities have the possibility to include the participación en plusvalías as one of the main sources of income for the land use plan (POT) and finance infrastructure, social housing, land acquisition for social housing, payments for urban renewal projects, general interest public works (e.g. maintenance of cultural heritage buildings). This mechanism is not a tax, a tariff or a contribution but a community’s right to participate in the benefits of the government’s action to improve urban development. However, several inaccuracies and gaps in the law prevent the wider use of this instrument. Accuracy of land appraisals, strict deadlines for calculating commercial prices before the adoption of the POT and new reference prices after the adoption of the plan, the definition of soil categories (i.e. suburban land), exemptions and special cases (i.e. social housing) and political and operational barriers complicate the use of participación en plusvalías (Barco de Botero and Smolka, n.d.[39]).
To expand the use of these two instruments, the central government could provide technical assistance to small- and medium-sized cities on how to deploy them and build on their feedback to make the mechanisms more user-friendly. Colombia could also use participación en plusvalías in situations where there are clear and substantial gains in obtaining citizen support and simplifying administrative procedures. One example is when changing the use of land from rural to urban use leads to increases in land prices, as is currently the case in Colombia. Participación en plusvalías could also be applied in the most dynamic areas of the city such as the city centre, where there is a higher potential for profit. Other land value capture tools that Colombia could consider using, based on the experience of OECD countries and cities to finance infrastructure, are, for example: development charges (Canada and the United States); tax increment financing districts (UK); and development rights or development contributions (New Zealand) (OECD, 2016[17]). Box 5.9 illustrate how the city of Amsterdam shares a similar situation to Colombian municipalities in terms of low fiscal autonomy and high dependence on transfers is trying to be more self-reliant on its own income.
Apart from those two land-based instruments, Colombia needs to reinforce property tax and update the cadastre. The property tax is already the second most important source of revenue of Colombian municipalities, so variations in its collection have repercussions on municipal income. The cadastre, as mentioned in Chapter 3, needs to be updated in most municipalities. Moreover, in the context of the Peace Agreement, Colombia requires a multipurpose land registration system that covers the entire territory (Escobar and Cárdenas, 2018[40]). This is because part of the origin of the Colombian conflict is in land issues and the development gaps between rural and urban areas. The multipurpose cadastre has to be more than a mere instrument to calculate and collect the property tax. The cadastre should be designed as an instrument of planning and information and to respond to issues related to land property, land use, environmental and territorial management. The MVCT already works on the development of a cadastre with a multipurpose approach to facilitate the management and urban development, contribute to evidence-based policy making and support municipalities in managing land use.13 To strengthen the multipurpose cadastre, the MVCT could delegate cadastral functions to territorial entities to increase the efficiency of the system (Escobar and Cárdenas, 2018[40]). Moreover, the MVCT could issue a new cadastral statute based on local (Bogotá, D.C., and Medellín) and international experience. The new NUP and the National Development Plan could emphasise the need to approve a new cadastre statute to speed up the work of the MVCT on the subject.
Box 5.9. Land-based instruments to manage urban growth in Amsterdam
Spatial planning is intimately related to Amsterdam’s strategy for urban growth and development financed by local (own-source) revenues and state transfers. Compared to other OECD cities, Amsterdam has some unique instruments with which to shape land use, namely high levels of public land ownership and the ground-lease system. The city (like all Dutch municipalities) has low fiscal autonomy; it relies to a high degree on transfers from other levels of government compared to own-source revenues. Local tax revenue in the Netherlands is 3.6% out of total revenue, while the average for the OECD was 10.6% in 2011. The national government remains heavily involved in funding key infrastructure projects.
The main merit of having such a high proportion of income from state transfers in combination with local autonomy and responsibility for executing these tasks is that it causes equality in service levels and social rights throughout the country. However, from a long-run perspective, this leaves the city in a vulnerable position. Following the 2008 economic crisis, there were large reductions in funding from the central government during the economic crisis and infrastructure investments, especially in new housing, were stalled. One way for the city of Amsterdam to reduce cyclical swings in revenue, and hence spending, is to increase its reliance on land-based sources of local revenue. Revenues from market value-based property taxes are considerably more stable over the business cycle than revenues from taxes on income or consumption.
Source: OECD (2017[41]), The Governance of Land Use in OECD Countries: Policy Analysis and Recommendations, https://dx.doi.org/10.1787/9789264268609-en.
Harnessing financial instruments to strengthen the system of cities
Leveraging taxes and fees to control sprawl
Colombia could design property taxes and development fees to encourage higher densities and compact development. Policy makers will have to analyse carefully what is included in and excluded from the tax base, as well as how the property is valued and what percentage of that value is taxable. Deskins and Fox (2008[42]) argue that by altering the relative price of property, property taxes can influence decisions about property improvement, size and location which in turn determines the level of density. For property taxes to decrease sprawl, it is necessary to eliminate policies that favour single-family homes over apartments and tax land value not property (OECD, 2013[43]). Taxing land value rather than buildings provides an incentive to develop land to its most profitable use and could encourage development in the urban core. Development fees or charges can also incentivise compact development and less sprawl as well as help fund infrastructure. These are one-off levies on developers to finance the growth-related capital costs associated with new development, where Colombian municipalities are having problems financing. When development fees reflect the true cost of providing services, they can buttress planning tools by guiding development to more efficient locations (Merk et al., 2012[44]; OECD, 2017[45]). It is necessary to consider that the costs of services can vary by location. There are three reasons for this: the distance to travel from each development to major facilities; infrastructure cost savings could be incurred for nodal developments as infrastructure is already there; and service standards may vary in different locations. Whatever the reason, efficient land use requires that development which imposes higher infrastructure costs on cities pays higher charges.
Densification is a complex task, as illustrated by the case of the metropolitan area of Nantes Saint-Nazaire in France. The process requires planning and a wide-ranging package of fiscal tools and incentives to promote higher-density housing (Box 5.10). It needs to provide incentives both to developers to work on brownfield sites and to residents who may be reluctant to reside in the city centre, including because the quality of existing housing is poor. The example of Nantes Saint-Nazaire shows that using infill mechanisms might, in some cases, lead to neighbourhood conflicts and legal challenges. It is less expensive for developers to work on greenfield sites than on brownfield; projects on the latter are therefore unattractive without subsidies.
Colombia should strive to use property taxes to limit urban sprawl. The impact of property taxes on land use, density and urban sprawl depends on several issues such as: what is included and excluded from the tax base, how property value is defined for different classes of property (i.e. residential, multi-residential, farm, commercial and industrial properties) and what percentage of the value is taxable (OECD, 2013[43]). When the relative price of property is changed, these taxes can influence the decision on property improvement, size and location and therefore an increase or decrease of urban sprawl. Colombia could explore using area-specific charges as they “…allow municipalities to vary the charge according to the different infrastructure costs imposed by each area on the city. A uniform charge subsidises inefficient uses of land; developments that impose higher costs are subsidised by developments that incur lower costs” (OECD, 2013, p. 83[43]).
Colombia’s payments for environmental services (pagos por servicios ambientales, PSA) (Gobierno de Colombia, 2018[46]), a system that provides an economic incentive to people who provide environmental services such as conserving a water basin or a forest, could be instrumental in controlling sprawl and fostering density. These payments change the logic of paying for polluting to one in which citizens are paid for protecting the environment. The instrument should continue but authorities must ensure that it is monitored and assessed on its impact on environmental protection and contribution to urban development objectives. In the Metropolitan Area of the Valle de Aburrá for example, the ten metropolitan municipalities created the BANCO2 Metropolitano del Valle de Aburrá, a strategy that seeks the voluntary compensation of the ecological or environmental footprint by citizens, companies and institutions settled in the area. The aim is to incentivise property owners in areas of environmental importance and strategic ecosystems (urban and rural) to continue conserving and restoring Andean forests, their biodiversity and the provision of environmental services that guarantee regional sustainability.14 Another possibility for Colombia would be to explore selling additional building rights. For example, in Brazil, the city of São Paulo introduced building rights for additional floor space on the top of existing buildings that exceeded normal maximum density. The building rights were sold in areas authorised for higher-density development. There are already some cases in Colombia where local authorities are selling additional building rights, such as the city of Cali.
An additional option could be to tax low-density development. For example, in 2010, France introduced a tax on development that does not meet minimum density requirements. Local governments have been given discretionary powers to impose a tax on the under-development of land. This means that local authorities are entitled to stipulate in their local plans a minimal level of density for development and when this threshold is not achieved by developers and builders, then the planning authority can impose a low-density tax called taxe d’aménagement.15 In the US, the city of Austin adopted a special transportation levy on all municipal utility bills based on the estimated average number of daily motor vehicle trips per household, in effect penalising less-dense development.
Colombia has recently regulated the use of tax increment financing (TIF) to influence land development and finance improvement in distressed or underdeveloped neighbourhoods (Gobierno de Colombia, 2019[19]; 2020[47]). TIF allows for using future gains in taxes to finance current improvements (Briffault, 2010[48]). For example, when the government builds roads, schools or parks, the value of the surrounding real estate often increases, which can, in turn, generate increased tax revenues. TIF uses the additional tax revenue to pay back the cost of investment in periods of 20 years. To improve the use of the TIF, Colombia needs to consider that it requires robust real estate conditions (i.e. a real estate market with diversity of investments, low interest rates for mortgages) and a favourable economic context. Its use is recommended when land uses are up-zoned (changing the zoning to allow for higher value, for example from industrial to residential, or denser use) and there is strong market demand. It can also be used in cases when the absence of prior development interest in a site is related to a site-specific impediment, with otherwise excellent conditions, for example land contamination of former industrial sites. In this case, it would be necessary to reduce upfront costs of development to make the site more attractive to private developers.16 Colombia should ensure that cities negotiate realistic time frames with developers for construction and determine cost-effective timing for bond issuance. It is recommended to use the TIF at the last possible moment when the private sector has committed to a development programme or construction project. National and departmental governments may act as guarantors to support cities’ ability to meet their contractual duties. In this respect, the case of the city of Atlanta (US) to redevelop a former steel mill site through TIFs is often considered a success story (Box 5.11).
Box 5.10. Encouraging densification and protecting environmental amenities – The case of Nantes Saint-Nazaire, France
Nantes and Saint-Nazaire are two linked cities in the northwest of France in the Pays de la Loire region. Together with their neighbouring communes, they form the sixth-largest urban conurbation in France, with a population of close to 1 million inhabitants. The functional area is experiencing a sustained period of population growth and economic activity, which has created anxiety over the implications for sustainable development. Most of the new developments are concentrated in the communes of Nantes and Saint-Nazaire in terms of housing and job opportunities. While this peri-urban development is common in France, development is taking place in an area close to a river and land with important ecological functions.
Spatial and land use planning in the region seeks to protect local land and water resources. Integrated land use planning rests upon a series of joint agreements among local communes led by the two urban cores of Nantes and Saint-Nazaire. This joint action is incentivised by the dominant role of water in the area, as managing the Loire estuary cannot be done on a commune-by-commune basis. Moreover, Nantes and Saint-Nazaire had to join forces to build a more efficient port complex that could compete with others in Europe. The agglomeration’s plan for territorial coherence (schéma de cohérence territorial, SCoT) ensures consistency across sectoral policies (i.e. housing, mobility, commercial development, environment and landscape) and explicitly seeks to reduce suburbanisation and peri-urbanisation. It was developed jointly by the 61 communes and intercommunalités1 and guides local development plans. The SCoT includes a target figure of 25 housing units per hectare in its perimeter, an increase from the previous 20 houses per hectare. The land use plan of the Nantes Métropole also pursues a densification agenda.
Land use planning tools alone will not be enough to allow Nantes Saint-Nazaire to achieve its densification objectives. Infill mechanisms are not easy to manage, brownfield remediation can add cost and time, infill sites may not suit the needs of builders and costs are typically higher than on greenfield sites. Thus, the metropolitan area needs to adopt a broader array of fiscal tools and incentives to promote higher-density housing that occupies a smaller surface area per person. This is important given the trend of increasing fiscal autonomy and demands on local taxation that incentivise sprawl. Local revenues in France have more than doubled since the early 1990s. In France, local governments are under increasing pressure to reduce their operating expenses, cut back on investment and pool services. Increasing revenue from local taxes is limited by thresholds set by the state and can be very unpopular among local residents. That is why local taxes have only experienced a very marginal increase over the past several years. Both Nantes and Saint-Nazaire are increasingly relying on own-source revenues to fund operating expenditures. The tightening fiscal environment mainly due to the lower government grants led to declining revenue; thus, Nantes Métropole reduced its operating expenses and increased local tax rates by 5.9% on average in 2016. The Pôle Métropolitain Nantes Saint-Nazaire also has its own budget, which consists of contributions from intercommunalités which is calculated by taking into account the weight of population in the cluster and its tax wealth.
1. Intercommunalités (intercommunality) in France refers to all actors and co operation bodies bringing together all or a number of municipalities for the exercise of some of their competencies. Intercommunality allows municipalities to come together as a public entity, either to provide certain services (household waste collection, sanitation, urban transport, etc.) or to develop real economic development, or planning. Since the law of 1999, municipalities cannot join more than one inter-municipal co operation entity. Intercomunality could be public institutions for inter-municipal co-operation, mixed unions, metropolitan poles and other forms of municipal co operation such as inter municipal agreements.
For further information, see https://www.adcf.org/files/TIC/QU_EST_CE_QUE_L_INTERCO_16P_19_11.pdf and https://www.insee.fr/fr/metadonnees/definition/c1346.
Source: OECD (2017[45]), The Governance of Land Use in France: Case studies of Clermont-Ferrand and Nantes Saint-Nazaire, https://dx.doi.org/10.1787/9789264268791-en.
Box 5.11. Redevelopment of Atlantic Station through TIF in Atlanta, US
In the US, the city of Atlanta (Georgia) has had as a policy goal to address population growth in a sustainable manner through the promotion of high-density, mixed-use, transit-oriented communities and remediating environmental contamination. Urban regeneration has been at the core of its strategies. One project, in particular, was a former steel mill site called Atlantic Station. The site was centrally located along major thoroughfares; however, it required significant environmental remediation discouraging the private sector from investing. Thus, the city government decided to finance the upfront costs of the required environmental remediation to incentivise the private sector to invest and unlock a positive fiscal economic impact.
The city government and developers agreed to a redevelopment vision of smart growth, a mixed-use district. The city established a “tax allocation district” and set a 25-year term for the project from 2001 to 2026. The city and developers agreed that the funds would be used to pay for the cost of new roads, utilities and environmental remediation (reimbursement). A multi-storey parking structure was planned. Bond offerings were successfully issued, whose proceeds were used to cover the costs of issuance and capitalised interest, with the balance utilised to fund infrastructure costs incurred by the developers. In the Atlantic Station case, one of the developers purchased the bonds to finance the improvements, avoiding the need for additional guaranties and credit enhancements.
Before the redevelopment project, the site generated USD 300 000 annually in property taxes and more than USD 30 million by 2013. The redevelopment of this disused site allowed the city government to achieve positive fiscal, economic and policy impacts.
Source: World Bank (n.d.[49]), Tax Increment Financing (TIF), https://urban-regeneration.worldbank.org/node/17.
Using transport fees and tariffs to incentivise compact development
Colombia can also use transport fees to encourage public transit and active mobility, and therefore promote urban green growth. Municipalities set transport fees and charges. To improve local revenues and more sustainable urban development, Colombian cities could explore using transport fees more widely. For example, large cities could use congestion charges where higher polluting vehicles are charged more than less polluting ones and use the revenue to finance public transport infrastructure and provision. Introducing congestion charges may be politically, economically and socially challenging. Arguments about their fairness, lack of respect for citizens’ privacy, damage to the economy, the models used for forecasting and zoning, the level of charges and technology used may reflect people’s concerns and opposition to the introduction of a congestion charge. However, these concerns can be considered and addressed in the policy design process. There are two key lessons from the experience of cities already using congestion charges such as London, Oslo and Stockholm. First, cities need to avoid focusing on a specific geographical zone from the outset, which restricts an objective design. And second, the driving force has been to raise revenue instead of prioritising transport efficiency and environmental gains (GIZ/ADB, 2015[50]). Another option for Colombia is to use variable parking fees and taxes can discourage car use by charging higher rates in congested areas. Another option is high occupancy toll lanes, as they encourage car-pooling by charging a toll on vehicles with less than a minimum number of occupants, as is done in Los Angeles, US (OECD, 2013[43]).
It must be mentioned that the use of these instruments will largely depend on the autonomy of the municipalities to set fees, tariffs and adjust tax rates. Thus, it is important to make the subnational financing system more flexible to give departments and municipalities more room for manoeuvre and seek alternatives to increase their revenues and provide public services and financial investment. In addition, these recommendations aim to complement the financial package that Colombia already has, such as green bonuses, zero-emission certifications and sustainable construction incentives that have an impact on urban green development.
Provide reliable funding for metropolitan areas
Colombia needs to match metropolitan responsibilities with corresponding financial resources. The challenge for Colombia, as for any other country, is to select the available taxes that could support metropolitan areas’ work. Property tax could be a source of revenue for metropolitan areas but, in the case of Colombia, it is municipalities’ main own source of financing and does not even cover municipal needs. The income tax is another option for Colombia as it is related to the benefits received from services. The experience of OECD countries recommends “piggybacking” onto higher-level income taxes by levying a tax as a supplement to the national income tax rather than operating a local income tax (OECD, 2015[32]). Table 5.3 provides some examples of the taxes used to finance metropolitan areas in high- and middle-income countries. Colombia should make as extensive as possible the use of charges and fees mostly when the metropolitan area provides services susceptible of being financed with user charges. Adopting a sales tax for metropolitan areas would allow them to benefit directly from economic activity and address the externalities of municipal public services when users from outside the metropolitan area (visitors and commuters) benefit from the services in the metropolitan area. Another option might be to leverage a share of the VAT as has been suggested by officials interviewed for this review as a source of funding for metropolitan areas as a way to give a confidence vote to fiscal decentralisation. There is limited experience across OECD countries on using a share of value added tax (VAT) to finance metropolitan areas. Table 5.3 shows that the metropolitan areas of Seoul (Korea), Moscow (Russian Federation) and Bangkok (Thailand) are some of the rare examples where a surtax on top of the national VAT is charged (Martinez-Vázquez and Muñoz, 2018[51]) but Colombia could certainly explore this possibility and pilot a scheme before using it more widely. User fees, mostly for transport services, are already included as part of the sources of financing for metropolitan areas. User fees could be designed in such a way as to charge for marginal costs, in other words those who commute longer distances should pay more. Moreover, since metropolitan areas are also responsible for the environment, user fees could be used to signal the scarcity and signal the need to preserve resources such as water and energy (OECD, 2015[32]).
Table 5.3. Example of taxes used to finance large metropolitan areas in OECD countries
Source: Based on Martinez-Vázquez, J. and A. Muñoz (2018[51]), “Metropolitan financing in Brazil: Current trends and lessons from the international experience”, https://publications.iadb.org/publications/english/document/Metropolitan-Financing-in-Brazil.pdf (accessed on 2 September 2021); Bahl, R., J. Linn and D. Wetzel (2013[52]), Financing Metropolitan Governments in Developing Countries.
Expanding collaboration with the private sector
Since funding infrastructure and investing in other construction projects is costly for most cities and metropolitan areas in Colombia, authorities at all levels of government need to use innovative fiscal arrangements to fund those investments. Colombia needs to enhance co-ordination across the different levels of government (national, departments, metropolitan areas [or region] and municipalities). However, in many instances, Colombia’s public sector alone will not be able to finance investment in critical infrastructure projects, thus collaboration with the private sector is essential. Colombian authorities at all levels need to design innovative tools to encourage private sector actors to invest in projects that are conducive to compact, connected, clean and inclusive development and that result in less public expenditure. For example, Colombia could use tariff regulations or subsidy schemes to increase the affordability of infrastructure. Tariff levels could be set by agreement in private sector concessions and other contracts, such as in water offtake agreements or power purchase agreements. From a private sector perspective, the agreements and the pricing will need to be financially viable, and additional government intervention may be required in order to achieve urban and inclusivity objectives.
Public-private partnerships (PPPs) to finance public investment have been used in Colombia, particularly to finance economic infrastructure (e.g. airports, roads and other transport infrastructure). Colombia could also make use of PPPs for social infrastructure facilities (e.g. schools, healthcare facilities and affordable housing) and use them for promoting local or regional urban development projects to help smaller service providers be competitive, for example in the water sector. PPPs could provide more opportunities for local business people, including small- and medium-sized enterprises (SMEs), to be involved in infrastructure development. The experience of OECD countries suggests that in countries where the PPP model is still underdeveloped, or at a very early stage of use such as Colombia, the public sector has an important role in subsidising and/or incentivising private participation in financing infrastructure. The COVID-19 pandemic and the economic crisis that it caused have resulted in a reduction of public and private resources to revamp long-term investments across the country. Colombia’s infrastructure gap is considerable, for example in motorways and railways infrastructure, and the capital available to fill those gaps do not seem to be enough. For example, the investment gap in infrastructure in Colombia corresponds to 8% of GDP. Almost 98% of foreign trade cargo is done by maritime mode, followed by roads with 2% and air with less than 0.5% which reflects a considerable lag in investment in transport infrastructure.17 These investment needs arise even more with population ageing, as residents require more specific infrastructure (i.e. better sidewalks and adapted public transport vehicles), and climate change.
Governing a PPP comes with caveats. Colombian authorities will need to ensure they represent value for money for the public sector. Colombia may wish to follow the OECD Principles for Public Governance of Public-Private Partnerships. Their objective is to assist governments in establishing a clear, predictable and legitimate institutional framework for PPPs supported by competent and well-resourced authorities, grounding the selection of PPPs in value for money and using the budgetary process transparently to minimise fiscal risks and ensure the integrity of the procurement process (OECD, 2012[53]). Several cities across OECD countries have built infrastructure using a PPP model. For example, local authorities in Vancouver, Canada, built the Canada Line, a rapid transit line in Metro Vancouver, using a PPP model where the three levels of government and the private sector took part considering the complexity and cost of the project. In Paris, France, the local government awarded a private company JC Decaux the concession to build, maintain and operate the public bicycle rental scheme called Velib. The investment and the operational cost of the system were borne by the private company, which received in exchange 50% of the total surface of city billboards. The model proved profitable for the government but not for the private company, which underestimated costs of repairing and replacing damaged bicycles. The agreement had to be renegotiated with more favourable terms for the company (OECD, 2012[14]).
Enhancing capacity for urban development
Urban development requires improving all levels of government capacity for managing their workforce, promoting evidence-informed policy making and engaging with stakeholders for participatory decision-making.
Enhancing the capacity and capability of the public workforce at all levels
Colombia has a small and unstable public service workforce (OECD, 2013[13]). To be able to design, implement and evaluate urban policies, governments at all levels need a professional and stable public workforce that has been selected by merit and is independent of political cycles (OECD, 2019[30]). A key lesson from OECD work on urban policy is that public employment and management is an essential part of urban policy. It is an instrument not only for the better functioning of government but also for the implementation of urban policy. A high performing local public employment system could also boost the capacity of cities to innovate and implement investment programmes and projects more efficiently and effectively.
Colombia has made valuable efforts to establish a culture of public service integrity and performance while cutting down on bureaucracy. The national government, in particular the bodies in charge of NUP, is staffed with a competent public workforce that allows the government to produce high-level policy documents, regulations and advice. The National Civil Service Commission (Comisión Nacional del Servicio Civil, CNSC) is in charge of managing the recruitment process and ensuring impartiality in the process. Vacancies are open to public competition and efforts are being made to create a culture of equity and equal opportunities.
Compared to other OECD countries and Latin American countries, Colombia has a very small public workforce, which in 2008 accounted for only 4.7% of total employment compared to about 22% for OECD countries on average (OECD, 2013[13]).18 That share reaches 10% in countries like Brazil, Chile and Mexico (Gobierno de Colombia, 2018[54]). The share of the cost of public employment in the general budget decreased from 17.2% in 2011 to 14% in 2015 (Gobierno de Colombia, 2018[54]). However, it is likely that there will be pressure to expand and restructure the national and subnational public workforce to meet new priorities as Colombia continues to develop its economy. It is thus crucial for Colombia to ensure that any growth of the government workforce be well planned and closely monitored to keep costs under control and improve capacity and results. In 2013, 43% of the Colombian public workforce was located in subnational governments (Figure 5.7), with the bulk of employees working in the education sector (OECD, 2016[17]).
Figure 5.7. Distribution of general employment across levels of government, 2019
Note: Data for Colombia refers to 2013.
Source: OECD (2021[55]), Government at a Glance 2021, https://dx.doi.org/10.1787/1c258f55-en. For Colombia: OECD (2016[17]), Making the Most of Public Investment in Colombia: Working Effectively across Levels of Government, https://dx.doi.org/10.1787/9789264265288-en.
Although Colombia has made strong efforts to ensure that the public service is staffed by career civil servants who are recruited on merit (OECD, 2013[13]), there is still a shortage of skilled workforce which constitutes a bottleneck for the design and implementation of investment projects at the local level (OECD, 2016[17]). Workforce planning needs to be developed as vacancies are filled to meet changing needs and new priorities but there is no analysis of the workforce numbers, structures and competencies required to deliver strategic objectives in a more efficient and effective manner or discussion about choices and trade‑offs. Much of the delivery of public services, especially health and welfare, is decentralised to the departments and municipal governments. It will therefore be important to develop workforce planning capabilities in services that are delivered at the subnational level.
Although controlling public employment levels to avoid increasing the public service’s operating expenditure and ensure financial sustainability has its merits, this must be done in a strategic manner to prevent damaging capacity. Current legislation limits the increase in operating costs of municipalities but does not consider their needs for new skills to perform their duties. The public service is understaffed, which weakens the implementation capacity of national and subnational governments. In Colombia, subnational staff expenditure represented almost 47% of total public staff expenditure, while the OECD average was 63.3% in 2012 (OECD, 2016[17]). Therefore, some subnational governments do not have the necessary human resources to implement urban-related policies. Table 5.4 shows that municipal public workforces represent a small share of the national public employment. Differences among municipalities are due to the size of the municipalities. For example, Medellín has approximately 2.2 million inhabitants, whereas Inírida and Tunja have 172 000 and 31 500 respectively, hance the differences in public employment size. This small local public workforce may be weakening the capacity of municipalities to implement investment projects. However, the real challenge is not how large the subnational public workforce is but how well trained and qualified it is to perform its duties. Highly trained staff tend to prefer to move to larger cities where they can aspire to better payment.
Table 5.4. Public employment levels in selected Colombian municipalities, October 2020
Note: The total number of public servants includes permanent and temporary staff and officials.
Source: Information provided to the OECD by the MVCT.
Moreover, in addition to the small size of the subnational public workforce, high staff turnover, low wages and the political rather than technical profiles of executives in municipalities further weaken the institutional capacity (OECD, 2016[17]). The rapid turnover of mayors and governors, resulting from their four-year term without re-election, does not facilitate the emergence of experienced senior executives over the long term, nor does it create incentives for long-term investment (OECD, 2016[17]). Municipal staff, including councillors of local mayors, often lack specific qualifications and receive little training. Colombia could reconsider proposals for either extending mayors’ mandates or allowing immediate re-election to provide more incentives to invest in longer-term projects. The experience of other countries in Latin America could serve as a source of inspiration. For example, mayors in Mexico also used to be limited to a single three‑year term but, in 2014, the federal government approved a reform to allow mayors to be re-elected. In addition, low wages limit the ability of municipalities to attract and retain a talented workforce. In general, due to weak capacities to design and implement investment projects, more than half of municipalities are unable to execute 20% of their budget (OECD, 2014[20]).
The challenge of understaffed subnational governments becomes even more relevant when considering that municipal associations and metropolitan areas and regions will require a number of qualified personnel to perform their duties. For example, if core municipalities in urban areas are to lead work related to transport and the environment, they will need to strengthen their capacity and capability in those areas. Colombian authorities will have to decide on the most practical way to staff intermediate-level authorities and how personnel will be remunerated. Metropolitan areas will likely need personnel with the skills and experience to manage PPPs and authorities will have to choose between retraining existing staff or hiring new staff. Using current staff for meeting the objectives of municipal associations, regardless of the specific scheme, runs the risk of overstretching the already limited capacity of municipalities and workloads of officials may increase, contributing to undermining motivation.
To strengthen the capabilities of the subnational public workforce, Colombia may wish to consider the following recommendations, including some that were already formulated in previous OECD reviews of Colombia but still hold true:
Ensure that the different technical assistance programmes to improve the capabilities of local public workforces give priority to weaker municipalities (OECD, 2016[17]).
Consider developing a comprehensive quantification of subnational public employees to get a clearer picture of the needs and gaps of territorial entities (OECD, 2016[17]). It is important for the government to continue to improve its own information on workforce numbers and to develop information on the costs of producing public goods and services relative to the GDP to manage production costs of goods and services, which is currently unavailable. This would allow for identifying the most problematic capacity gaps and listing a required set of skills for the recruitment of civil servants.
Develop a list of minimum adequate skills for the (subnational) public service to limit inadequate clientelist hiring and contribute to reducing the high turnover as much as possible (OECD, 2016[17]).
Invest in strategic government-wide workforce planning at all levels of government. The National Civil Service Commission (CNSC) should have the leading role in supporting subnational governments in this respect.
Strengthen the capacity of departments and municipalities to manage their public workforce to support urban policy development and implementation by: professionalising the subnational public workforce; investing in strategic workforce planning (at least in the largest cities); facilitating the movement of staff across levels of government to support skills development; developing managerial skills of municipal officials; and setting a programme for the certification of competencies acquired through professional experience to facilitate career development.
The national government, with the leadership of the CNCS, could consider the establishment of a senior civil service (SCS) system, which could be constituted by the top ranks in the broader civil service system for central government employees. The reasons are that an SCS system could: help overcome fragmentation into silos in the central government by creating a corporate culture and facilitating better mobility across ministries and administrative departments; enable flexibility in recruitment; and clarify boundaries between politics and administration.
Invest in continuous training of municipal public officials with the support of the national government and departments. This could be done by setting co-operation agreements with universities and technical institutions.
Improving the capacity for evidence-informed policy making, in particular at the municipal level
In Colombian as in other OECD countries, building and improving the capacity of government for evidence-informed policy making is paramount as connecting evidence and policy making remains a challenge. The OECD defines evidence-informed policy making as “…a process whereby multiple sources of information, including statistics, data and the best available research evidence and evaluations, are consulted before making a decision to plan, implement, and (where relevant) alter public policies and programmes.” (OECD, 2020, p. 9[56]). At the national level, Colombia has a strong capacity for evidence-informed policy making. The Administrative Department for National Statistics (DANE) and the National Planning Department (DNP) are the institutions that provide sound data and research that supports decision-making and policy making in different policy areas. The Misión de Ciudades (task force) for the development of the System of Cities (CONPES 3819) based its conclusions on academic research, development of surveys and discussions among experts in the field.
At the subnational level, particularly at the municipal level, access to timely and accurate data and information for decision-making and policy making in urban planning is not always possible. For almost 60% of municipalities that took part in the OECD Survey on Urban Policy in Colombia in 2021, there is information and data to support their decision-making on urban policy development, which is not always updated; for 20%, there is a consistent lack of updated and timely data. Figure 5.8 shows that the lack of technical infrastructure and funding, and of accurate data are the main barriers municipalities face for evidence-informed policy making. This suggests that municipalities need to invest in building the necessary infrastructure to generate effective connections between the supply and demand for evidence in the policy-making process. This may require scaling up a full range of skills for generating data and using it, as well as engaging with different stakeholders and evaluating urban policy progress.
Figure 5.8. Factors that prevent accessing data and information for policy making at the municipal level in Colombia, n=72
Note: Answers to question “Q.6.4. What are the most important factors that prevent your municipality from using data and information for urban development and land use planning?”. Municipalities were asked to select all possible options.
Source: OECD Survey on Urban Development in Colombia 2021, conducted with the support of the MVCT and AsoCapitales
Municipalities’ access to timely and accurate data and information varies depending on the policy sector. Table 5.5 shows that, in general, municipalities in Colombia have access to data and information although not always updated or timely. Education is the policy area in which there is more data to support policy making but this may be due to the fact that municipalities get transfers from the government to pay for teachers and information is mostly up to date. Transport and mobility, a critical area that has an impact on land use and housing, is where municipalities seem to have more problems accessing data and information for decision-making and planning. The general conclusion from Table 5.5 is that Colombian municipalities need to strengthen their ability to use and build evidence for policy making. This could start by evaluating systematically programmes and investment projects to build knowledge to better inform future decisions. According to the OECD Survey on Urban Development in Colombia 2021, only 16 out of 66 municipalities systematically evaluate the results of the different programmes and investment projects; 13 do not conduct any evaluation and the rest only evaluate certain parts of the programmes but not systematically.
Table 5.5. Access to data and information per policy sector in Colombian municipalities
Note: Answers to question “Q.6.3. Urban planning requires access to information and data on different policy issues. Does your municipality have access to timely and accurate data and information to support its work on the development and urban planning in the following areas?”. Municipalities were requested to provide an answer per item but had the possibility of not providing answers in every single item.
Source: OECD Survey on Urban Development in Colombia 2021, conducted with the support of MVCT and AsoCapitales.
Principle 11 of the OECD Principles on Urban Policy suggests that it is essential to foster monitoring, evaluation and accountability of urban governance and policy outcomes (OECD, 2019[30]). To this end, countries should promote dedicated monitoring and evaluation tools and/or institutions across levels of government endowed with sufficient capacity, independence and resources throughout the policy-making cycle with the participation of local and regional governments. Moreover, Principle 11 suggests that leveraging the potential of data to ground urban policy decisions in up-to-date, quality information and evidence and developing a sound system of indicators to track progress at the subnational level against national and global commitments are conducive to improving the capacity for evidence-informed policy making at all levels of government.
To enable change, Colombian municipalities, with the support of DANE and the DNP, need to gather information on current capacities and the existing barriers and facilitators of evidence use. This would allow them to identify capacity gaps and the skills that are needed to support evidence-informed policy making. DANE and the DNP should support municipalities in strengthening organisational tools, resources and processes, investing in basic infrastructure, including data management systems and knowledge brokers, and establishing strategic units in municipal administrations to champion an evidence-based approach.
Improving Colombian municipalities’ capacity for evidence-informed urban policy making also requires leadership. Municipalities need strategic and committed leadership from politically elected officials and units with a mandate for delivering urban policies. This would require training and developing the skills of municipal (senior) officials for being champions in the use of evidence for decision and policy making. The experiences of Canada and Finland could provide Colombia with some ideas on how these training programmes could be structured (Box 5.12). Although they have been developed for officials at the national level, they could be adapted to support the training of municipal political and administrative leadership. Colombia’s Superior School of Public Administration could have a lead role in promoting the development of skills of municipal officials in the use of evidence for policy making.
Box 5.12. Training of senior officials to build an understanding of evidence-informed policy making in Canada, Finland and Portugal
In Canada, the Executive Training in Research Application (EXTRA) programme, targeted at leaders in the healthcare field, provides support and development for leaders in using research. EXTRA builds leadership and organisational capacity to achieve evidence-informed improvement that enhances patient and family experience of care, the health of populations and value for money, through integrated hands-on coaching and customised curriculum that focuses on building the needs of a specific organisation. On completing the training, participants are expected to use evidence in their policy making and will be able to train their co-workers and bring about organisational change.
In the 1960s, Finland’s parliament launched the Finnish Innovation Fund called SITRA, as an independent foundation. Since 2017, it has organised Public Sector Leadership training, to strengthen the ability of public sector leaders to handle challenges and support the public sector in pursuing its social objectives. To this end, it developed a training programme for senior managers from ministries and agencies to improve their skills to put new practices and lessons learned from experiments into practice.
Source: For Canada: EXTRA, www.healthcareexcellence.ca/en/what-we-do/what-we-do-together/extra-executive-training-program-ready-to-make-a-connection/ (accessed on 14 March 2022); For Finland: SITRA (n.d.[57]), Homepage, https://www.sitra.fi/en/ (accessed on 12 November 2021).
The national government (DANE and DNP) should take the necessary steps to strengthen evidence-informed policy making through regulatory and legislative anchors. This could help prevent initiatives that favour building capacity for evidence-informed policy making from being “washed out” after an initial period of enthusiasm (OECD, 2020[56]).
It is essential that all levels of government engage in monitoring programme delivery, use impact evaluation to measure programme effectiveness and make the information public to enhance accountability. This is important for building knowledge on what works and acting on that knowledge to guide future decision-making. Monitoring programme delivery will ensure that programmes operate as intended and identify problems or opportunities for improvement. The rigorous impact evaluation will provide municipal policy makers and programme managers with hard evidence about what a programme actually achieves. The national government could set the conditions for monitoring and evaluation of programmes funded through transfers and royalties. Monitoring and evaluation should be included in the investment project proposals to ensure there is a budget for them.
Strengthening stakeholders’ involvement in urban policy development
Colombia has engaged stakeholders actively in the planning stage of urban public policies at the national and subnational levels. The elaboration of the System of Cities, for example, counted with the participation of a large number of stakeholders from the public, private and academic sectors as well as citizens. Different workshops and regional fora were organised in 16 cities to obtain feedback and suggestions for the elaboration of the NUP. The task force (Misión) in charge of the elaboration of the policy document presented its findings in different fora organised by AsoCapitales, the National Urban Forum and even the World Urban Forum. The conclusions of these events helped improve the strategies that were incorporated in the final policy document known as CONPES 3819 or System of Cities.
Similarly, cities like Medellín have a long experience of engaging with citizens and other stakeholders for the design of investment projects. However, not all local governments have the same level of experience in stakeholder engagement. In general, stakeholders’ involvement appears to be limited by low skills and scarce financial resources for participatory and networking processes in many municipalities across Colombia (OECD, 2016[17]). Moreover, local authorities may show resistance to stakeholders’ involvement, seeing it as a constraint for their administration, leading to an absence of commitment in providing adequate information to residents. Currently, high levels of mistrust also hamper participation, as stakeholders are sceptical about the actual impact of participatory processes. These are generally regarded as ways to legitimise decisions already made unilaterally. Poor communication channels may also make citizens suspicious of the government’s decisions and likely to oppose their implementation.
To promote stakeholders’ engagement in urban planning, municipalities invite stakeholders to manifest their priorities for the elaboration of urban development plans and land use plans and provide comments on the draft plans proposals (Figure 5.9). Draft plans are published on the Internet and municipalities expect stakeholders to consult them to provide comments. Although this approach reflects transparency, it requires stakeholders to be aware of the publication of these documents and understand them. It is assumed that stakeholders will actively look for these documents and have the knowledge and background information to provide meaningful comments and proposals. Some municipalities organise fora and discussion groups to explain the different project proposals, interacting more with stakeholders. This is a more active approach to engage with residents, build trust and eventually obtain support for development and investment plans.
Maintaining effective citizen engagement is critical to improving municipal objectives. For example, in the city of Toyama, Japan, transport investment projects such as a new tram line have been realised in very short periods of time (i.e. three years for a new tramcar line), notably due to extensive dialogue between the mayor and residents (OECD, 2012[14]). The mayor of Toyama held more than 200 meetings in 3 years, not only in the districts near the new tram line but throughout the city, explaining the significance and purpose of the project in order to gain citizens’ consent.
In Colombia, the lack of political will to encourage and motivate people to engage in city governance in some cases is a key obstacle for larger participation. In several instances, citizen engagement might be regarded as resource-intensive and time-consuming, and as a factor that can undermine the government’s plans. Another limitation is that, too often, citizens do not know or understand their rights and responsibilities and they are not able to express their concerns through adequate channels. If sustainable urban development is to be achieved in Colombia, there needs to be an overall shift in attitudes and approaches on the part of local policy makers, urban planners and citizens. Municipal authorities need to recognise the value of citizens’ engagement and believe in an inclusive approach for it to be effective.
Despite commendable efforts, Colombian municipal governments still operate mostly in a top-down, hierarchical manner, which complicates integrating and facilitating citizens’ proposals. The complexity of local governance structures and excessive bureaucracy, as well as the lack of time, awareness and confidence, may also hamper broader community engagement. The low number of metropolitan areas that have been formalised in Colombia is an illustration of the challenge of encouraging citizen participation. To constitute a metropolitan area, local authorities need to conduct a public consultation, with at least three-quarters of the electoral registry taking part in the exercise. This requirement has deterred many municipalities from working towards the creation of a metropolitan area, even when other conditions were met.
Figure 5.9. Promoting stakeholders’ engagement in urban planning, n=72
Note: Answers to question “Q.6.6. How does your municipality promote the participation of citizens, the private sector, academic and others in municipal urban planning?”. Municipalities were asked to select all options that applied.
Source: OECD Survey on Urban Development in Colombia 2021, conducted with the support of MVCT and AsoCapitales.
To improve the engagement and representativeness of the different social groups in urban policy making, Colombia needs to promote inclusive participatory processes and ensure that those affected by urban planning decisions have a say in the process of policy making. In line with the OECD Principles on Urban Policy (OECD, 2019[30]), municipalities should strive to engage different social groups such as women, elderly, minorities, etc. that are more difficult to reach or those with traditionally low involvement profiles in strategic planning discussions. For that purpose, municipalities should:
Acknowledge that stakeholders’ participation in local decision-making is a process and not a single event. Municipal planning documents should make reference to the importance of engaging with stakeholders and grant them the opportunity to influence decisions that affect their lives. Municipalities should also be aware that seeking external input does not necessarily mean they have to do what the public wants. When conducting meaningful public participation, municipalities will gather input from a wide spectrum of stakeholder interests, resulting in a wide range of views and concerns and providing fair treatment, meaningful involvement and social inclusion for all people. Municipal authorities will have to balance all those different views and concerns and inform the public how their input was considered.
Invest in training staff on civic engagement to improve the capacity and capability of the municipalities to make the most of stakeholders’ participation. Municipal public employees specialising in civic engagement would have better competencies to seek, analyse and evaluate different points of view about municipal issues.
Secure the necessary budgetary and trained human resources to conduct public engagement processes. There should be dedicated officers to provide support and information about the process of strategic planning to ensure that people know how their views have been taken into account.
Manage the expectations of participants to maintain trust and commitment, by making it clear to all stakeholders what outcomes are possible and what restrictions are in place upon decision-making.
Promote participation of the private sector in strategic planning. Municipalities should ensure that participation is focused, well defined and practical in nature (i.e. financing or implementation of plans), as part of steering groups looking at specific relevant issues (i.e. business development, cluster work, etc.).
Emphasise the participation of the most vulnerable residents, such as women, the elderly, youth and children, the disabled, migrants and minorities.
Improve communication channels to socialise the concrete impact of consultation processes and how residents’ feedback has been integrated into investment decisions.
The experience of OECD countries suggests that public participation in city planning may be formal or informal. In some cities, there is a legal basis for formal participation, when community participation is required by law. For instance, in British Columbia, Canada, the Community Charter provides the statutory framework for all municipalities (except for the city of Vancouver) and sets the provisions for public participation.19 In the European Union, the European Citizens’ Initiative enables citizens to ask the commission to bring forward a legislative proposal if enough support is guaranteed.20 In Rotterdam, the Netherlands, the Citizen Initiative Regulation set the participatory arrangements for “citizens initiatives” and “interactive decision-making”.21 When engaging with the community, the experience of Greater Vancouver, Canada, provides some useful practical lessons that Colombian authorities may wish to consider (Box 5.13). A key takeaway from this example is that Colombian authorities need to have clarity on what they want to achieve on urban development before embarking on a consultation process.
Box 5.13. Lessons from Greater Vancouver, Canada, on community engagement
Greater Vancouver has a long history of civic engagement. The experience of local authorities suggests that to make the most of public engagement, it is essential to:
Have a clear understanding of what the local or regional authority wants to achieve in issues such as land use, transport and housing.
Be clear about whether they want to inform or gather input from the public.
Ensure citizens are informed, from the outset, of the objectives of the exercise to manage expectations.
Have a good plan that determines who can take part and for what reason.
Share with the community the feedback received from people and other stakeholders. Reporting back on what was heard and how it was heard is of the utmost importance to maintain credibility as normally people want to know their feedback was used.
Take the initiative to contact people as they would never or very seldom approach the government with their ideas or feedback.
Ensure messages are simple as people should not feel overwhelmed.
Use ICT to facilitate the interaction between citizens and government, but online consultations should be quick (2-3 minutes) and short (4 questions maximum).
Source: Huerta Melchor, O. and A. Lembcke (2020[31]), “Developing transit-oriented communities for better accessibility and affordability: The case of the Metro Vancouver Region”, https://doi.org/10.1787/f2bb60fc-en.
Finally, Colombian authorities could promote stakeholders’ engagement in urban planning through NUPs. The new urban policy framework could make the case on the relevance of engaging stakeholders from the early stages of the process. This could send a powerful message to subnational authorities on investing in public consultation. However, as the OECD has already noted, stakeholders’ engagement creates certain risks for Colombia due to the potential risk of the consultation process being captured by interest groups that wish to drive investment strategy (OECD, 2016[17]). This is particularly important in conflict areas where local governments must take steps to prevent capture by special interest groups.
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Notes
← 1. Different pieces of legislation were passed between 1991 and 2011 and regulated inter-governmental relations, including fiscal relations across levels of government.
← 2. Agglomerations here refers to urban areas not formally constituted as metropolitan areas.
← 3. For reference, see Cartilla de la Región Metropolitana Bogotá‑Cundinamarca www.regionmetropolitana.com/cartilla-region-metropolitana.
← 4. For further information, see https://bogota.gov.co/mi‑ciudad/pot‑bogota‑reverdece‑2022‑2035/articulado-del-pot-bogota-reverdece-2022-2035.
← 5. For further information, see Toronto City Summit, http://www.torontocitysummit.ca/.accessed on 15 October 2021.
← 6. For further information, see https://www.fcm.org.co/ accessed on 19 October 2021
← 7. Based on the information provided by the Colombian government to the OECD in the background questionnaire.
← 8. Ibid.
← 9. Ibid.
← 10. Recommendation to Colombia from the Ministry of Housing and Urban Development of Chile as part of the review process.
← 11. For further information, see https://www.gerencie.com/contribucion-por-valorizacion.html.
← 12. For further information, see http://www.sdp.gov.co/gestion-socioeconomica/economia-urbana/plusvalia.
← 13. For further information, see https://www.minvivienda.gov.co/viceministerio-de-vivienda/espacio-urbano-y-territorial/aula-de-financiamiento/informacion-territorial/catastro-con-enfoque-multiproposito.
← 14. For further information, see https://www.metropol.gov.co/ambiental/Paginas/consumo-sostenible/pagos-por-servicios-ambientales.aspx.
← 15. For further information, see: https://www.economie.gouv.fr/particuliers/taxe-amenagement .
← 16. For further information, see World Bank, Tax Increment Financing, https://urban-regeneration.worldbank.org/node/17.
← 17. For further information, see: www.legiscomex.com/documentos/desarrollo-infraestructura-colombia-rci285.
← 18. This is the latest information available and is also used by Colombian authorities in their latest reports (Gobierno de Colombia, 2018[54]).
← 19. For further information, see https://www2.gov.bc.ca/gov/content/governments/local-governments/facts-framework/legislative-framework.