The Colombian Economy and Its Regional Structural Challenges: A Linkages Approach

Preface
Acknowledgments
Contents
Editors and Contributors
1 Introduction and Overview
	1.1 Background
	1.2 Statement of Aims
	1.3 What Does This Book Do Differently?
	1.4 What Does This Book Leave Aside and Why?
	1.5 Structure of the Book
	1.6 The Road Ahead
	References
Part I Regional Setting
2 Is There a Case for Regional Policies in Colombia?
	2.1 Introduction
	2.2 Literature Review
		2.2.1 Fiscal Decentralization
		2.2.2 Administrative Decentralization
		2.2.3 Political Decentralization
	2.3 Change in Regional Policy
	2.4 Final Considerations
	References
3 Income Inequalities in Colombia
	3.1 Introduction
	3.2 Stylized Facts of the Inequalities in Colombia
		3.2.1 Changes in Inequalities in the 2010s
		3.2.2 Factors Associated with Changes in Inequalities
	3.3 Data and Methodology
	3.4 Decomposition of Changes in Income Distribution
		3.4.1 Components Associated with the National Variation in Inequalities, 2010–2019
		3.4.2 Changes in Regional Income Inequalities in the 2010s
	3.5 Conclusions and Discussion
	Appendix
	References
4 Regional Convergence in Colombia in the Twenty-First Century
	4.1 Introduction
	4.2 The Colombian Economy During the 21st Century
	4.3 International and National Literature
	4.4 Convergence Estimation and Its Decomposition
		4.4.1 Decomposition
		4.4.2 Spatial Dependence
	4.5 Data and Methodology
	4.6 Results
		4.6.1 Beta Convergence Timing
		4.6.2 Beta Convergence Decomposition
		4.6.3 Spatial Dependence
		4.6.4 Convergence on Other Indicators
	4.7 Final Considerations
	Appendix
	References
Part II Modelling Framework
5 The Interregional Input–Output System for Colombia
	5.1 Introduction
	5.2 Interregional Input–Output Matrix for Colombia
		5.2.1 Initial Data Treatment
		5.2.2 Estimation of the Interregional Trade Matrices
	5.3 Regionalization Procedure
	5.4 Structural Analysis
		5.4.1 Output Composition
		5.4.2 Multiplier Analysis
		5.4.3 Interregional Linkages
	5.5 Final Considerations
	Appendix 1: List of Regions
	Appendix 2: List of sectors
	Appendix 3: Sectoral GRP Data
	Appendix 4: Average Travel Time (in Minutes)
	Appendix 5A: Interregional Trade in Colombia, 2015 (in COP Billions)
	Appendix 5B: Interregional Trade in Colombia: Purchases Shares, 2015
	Appendix 5C: Interregional Trade in Colombia: Sales Shares, 2015
	References
6 The Interregional Computable General Equilibrium Model for Colombia
	6.1 Introduction
	6.2 The Johansen Approach
	6.3 Specification of the CEER Model
	6.4 Calibration
	6.5 Final Considerations
	References
Part III Structural Analysis
7 Revisiting the Structural Interdependence Among Colombian Departments
	7.1 Introduction
	7.2 The Structure of Colombian Regional and International Trade
	7.3 Data and Methodology
		7.3.1 Data
		7.3.2 Methodology
	7.4 Results
	7.5 Final Considerations
	References
8 Economic Base and Regional Specialization in Colombia: A Note on Input–Output Linkages
	8.1 Introduction
	8.2 Economic Base and Regional Specialization
	8.3 Data and Methodology
		8.3.1 Economic-Base Output Multiplier
		8.3.2 Partition Analysis of Indirect Production Generation by the Economic Base
		8.3.3 Econometric Model
	8.4 Economic Base of the Colombian Departments
	8.5 Results
		8.5.1 Interregional Multiplier Effects of the Economic Base
		8.5.2 Miyazawa’s Analysis
		8.5.3 Results of the Econometric Model
	8.6 Final Considerations
	References
9 Trade in Value-Added: Does MFN Status Matter for Colombian Regions?
	9.1 Introduction
	9.2 International and Domestic Trade in Colombia
		9.2.1 Colombian Participation in International Trade
		9.2.2 International and Interregional Trade in Colombia by Department
	9.3 Data and Methodology
		9.3.1 Data
		9.3.2 Hierarchy of Spatial Production and Feedback Analysis
	9.4 Measurement of Regional Value-Added in Interregional and International Trade Flows
	9.5 Results
		9.5.1 Concentration and Structural Interdependence Among Colombian Departments
	9.6 Final Considerations
	Appendix 1
	Appendix 2
	References
10 Chaining Juan Valdez: Linkages in the Colombian Coffee Production
	10.1 Introduction
	10.2 Coffee Production in Colombia
		10.2.1 Spatial Characteristics of the Coffee Production in Colombia
		10.2.2 Coffee Productive Structure in Colombia
	10.3 Data and Methodology: The Hypothetical Extraction Method and Data Source
	10.4 Results
		10.4.1 What if the Coffee-Growing and Coffee-Processing Sectors Did not Exist?
		10.4.2 What is the Domestic Value-Added Content of Colombian Coffee Exports?
	10.5 Final Considerations
	References
11 Urban Travelers Go to the Beach: Regional Effects of Domestic Tourism in Colombia
	11.1 Introduction
	11.2 A Brief Approach to Tourism Analysis in Colombia
		11.2.1 Geography of Domestic Tourism Expenditures in Colombia
		11.2.2 Systemic Effects of Tourism: Potential for Interregional Transfers
	11.3 Literature Review
	11.4 Data and Methodology
		11.4.1 Expenditure Patterns
	11.5 Results
		11.5.1 National Effects
		11.5.2 Regional Effects: Output and Employment
	11.6 Final Considerations
	References
12 Regional Differences in the Economic Impact of Lockdown Measures to Prevent the Spread of COVID-19: A Case Study for Colombia
	12.1 Introduction
	12.2 Data and Methodology
	12.3 A First View of the Pre-lockdown Regional Economies
	12.4 Results
		12.4.1 Adjustment Factor F
		12.4.2 Workers in Isolation
		12.4.3 Economic Impact
	12.5 Final Considerations
	Appendix
	References
Part IV Structural Development Issues
13 Boiling Hot! Economy-Wide Impacts of Climate Change on Colombian Coffee Yields
	13.1 Climate Change and Global Warming
	13.2 Colombian Coffee Industry Brief History
		13.2.1 Early History (1830–1958)
		13.2.2 The Present Era (2015)
	13.3 Underlying Harvesting Mechanisms
	13.4 Climate Shock: Results and Analysis
	13.5 Final Remarks
	References
14 The Geography of Manufacturing Productivity Shocks in Colombia
	14.1 Introduction
	14.2 Literature Review
	14.3 Geography of Colombian Manufacturing Activity
	14.4 Data and Methodology
	14.5 Results
		14.5.1 Economic Effects of Productivity Changes
		14.5.2 Regional Equity-Efficiency Trade-Off
		14.5.3 Regional Competition Versus Complementarity
		14.5.4 Supply-Side Key Sector Analysis
	14.6 Final Considerations
	References
15 The Interplay of Services Productivity and the Competitiveness of Colombian Exports
	15.1 Introduction
	15.2 Do Service Sectors Matter to Exports?
	15.3 Data and Methodology
	15.4 Results
		15.4.1 Regional Impacts
		15.4.2 Interregional Linkages and the Propagation of KIBS Productivity Shocks
		15.4.3 Impacts on Foreign Exports
		15.4.4 Sensitivity Analysis
	15.5 Conclusions
	Appendix
	References
16 Impact Assessment of Interregional Transfers Scenarios in the Colombian Economy
	16.1 Introduction
	16.2 Regional Inequalities and Subnational Transfers
		16.2.1 Colombian Institutional Details
	16.3 Specification of the CEER Model
		16.3.1 Modeling the Fiscal Transfer Scenarios
	16.4 Fiscal Scenarios
	16.5 Simulation Results
		16.5.1 Effects of Governmental Transfer Redistribution
		16.5.2 Spillover Effects on Regional Growth
		16.5.3 Effects on Regional Inequality
		16.5.4 Effects of Government Transfer Redistribution Accompanied by Productivity Gains
	16.6 Final Considerations
	Appendix—Scenario and Detailed Shocks
	References
17 Royalties and Regional Disparities
	17.1 Introduction
	17.2 The Sistema General De Regalías (SGR)
	17.3 Case Study
	17.4 Modeling the Royalties Revenues and Expenditures
	17.5 Results
	17.6 Final Considerations
	References