Natural resource windfalls and efficiency of local government expenditures: evidence from Peru

We study the role of natural resource windfalls in explaining the efficiency of public expenditures. Using a rich dataset of expenditures and public good provision for 1,836 municipalities in Peru for period 2001-2010, we estimate a non-monotonic relationship between the efficiency of public good provision and the level of natural resource transfers. Local governments that were extremely favored by the boom of mineral prices were more efficient in using fiscal windfalls whereas those benefited with modest transfers were more inefficient. These results can be explained by the increase in political competition associated with the boom. However, the fact that increases in efficiency were related to reductions in public good provision casts doubts about the beneficial effects of political competition in promoting efficiency.

Land Restitution and Prevention of Forced Displacement in Colombia

The armed conflict in Colombia, which has generated over three million internally displaced persons, has dramatic humanitarian consequences and raises serious issues regarding the protection of displaced peoples’ rights. The underlying reasons for the displacement often lie in the dynamics associated with territorial control and land seizures undertaken for strategic, military or purely economic purposes. Domestic and international legal provisions have established the victims’ right to the restitution of their homes and property as the “preferred remedy” in cases of displacement. However, policies dealing with displacement, both those of the Colombian government and of several international institutions, fail to take this sufficiently into account. A comprehensive reparation policy for victims must necessarily entail the reversion of lands, territories and goods seized in Colombia under the pretext of the internal armed conflict.