Decentralization in Chile

TABLES

  • TABLE 1:
    Human Development Indicators in Chile
  • TABLE 2:
    Economic Performance in Chile
  • TABLE 3:
    Regional Characteristics
  • TABLE 4:
    Characteristics of Municipalities
  • TABLE 5:
    Financing of Basic Health and Education
  • TABLE 6:
    Sources of Revenue of Municipalities:1990
  • TABLE 7:
    Souces of Funds for Investment:1990
  • TABLE 8:
    Decentralization Ratios in Chile
  • TABLE 9:
    Sectoral Decentralization Ratios
  • TABLE 10:
    Structure of Municipal Personnel
  • TABLE 11:
    Human Development Ratios
  • TABLE 12:
    Human Development Ratios by Level of Government
  • TABLE 13:
    Priority Ratios within Education
  • TABLE 14:
    Investment Performance
  • TABLE 15:
    Relationship between Education Exp. and Income
  • TABLE 16:
    Performance in Municipal Schools:1980s
  • TABLE 17:
    Other Educational Indicators
  • TABLE 18:
    Health Service Resources
  • TABLE 19:
    Health Services and Outcomes
  • TABLE 20:
    Relationship Between Education Exp. and Income
  • TABLE 21:
    Distribution of Public Investment by Region


    		•


    TABLE 1

    Human Development Indicators in Chile
    1960 1970 1980 All developing countries 1990
    Life expectancy at birth 57.1 67(77) 71.8 62.8
    Under 5 mortality rate (per 1,000 live births) 143 90 27 112
    Maternal mortality (per 100,000 live births) - - 67(88) 420(88)
    Population with access to safe water (%) - 70(75-80) 89(88-90) 68(88-90)
    Combined primary and secondary enrolment rate(%) 75 87 92(88-90) 72
    Adult literacy (%) 84 89 93 64

    Source: Development Report, 1992; 1990
    World Development Report, 1979


    TABLE 2

    Economic Performance in Chile
    Growth in GDP per capita at constant prices:%p.a. Inflation rate:%p.a.1 Poverty:% Unemployment:
    %
    1970-1980 +0.9 130.2 1970 17 1970 4.1
    1980-1985 -1.9 21.3 1987 38 1980 11.7
    1985-1990 +4.4 20.4 1990 35 1990 6.0
    1990/1991 +2.5 23.0 1991 34 1991 6.0

    1 Consumer prices in Santiago
    Source: CEPAL, Statistical Yearbook for Latin America 1991
    MIDEPLAN, 1992b
    Raczynski and Romaghera, 1992


    TABLE 3

    Regional Characteristics
    Area Km2 (000s) Population (000s) Population density (people per 000 Km2) % below min. cons. 1987 Regional product per capita $US
    NORTH
    I
    II
    III
    IV    		 59
    126
    76
    41    		 358
    390
    198
    486    		 6,161
    3,081
    2,618
    11,966    		 37.9
    35.0
    43.3
    47.5    		 1,802
    2,747
    2,144
    874
    CENTRAL
    SMR(1)
    V
    VI    		 15
    16
    16    		 5,236
    1,382
    650    		 341,155
    84,285
    39,704    		 36.0
    39.3
    42.6    		 1,571
    1,465
    1,990
    SOUTH
    VII
    VIII
    IX    		 30
    37
    32    		 840
    1,674
    796    		 27,736
    45,336
    24,983    		 43.7
    53.5
    59.8    		 951
    1,145
    791
    EXTREME SOUTH
    X
    XI
    XII

    ALL REGIONS    		 67
    109
    132


    757    		 923
    80
    160


    13,173    		 13,770
    736
    1,211


    17,411    		 45.6
    22.6
    15.7


    41.7    		 1,014
    1,138
    3,431


    1,435


    (1) Santiago Metropolitan Region
    Source: World Bank, 1992a, p.15


    TABLE 4

    Characteristics of Municipalities
    Population Size No. %of country's population % of country's poor population % of municipalities poor
    under 1,000 108 4.5 4.4 49.1
    1,000-5,000 161 28.1 34.8 50.9
    5,000-10,000 16 10.2 11.9 6.3
    10,000+ 40 57.2 48.9 22.5
    ALL SIZES 325(1) 100.0 100.0 44.6

    (1) Excludes new municipalities of metropolitan region
    Source: World Bank, 1992a, p.13


    TABLE 5

    Financing of Basic Health and Education
    1990 prices: million pesos
    1987 1990
    Current expenditure on health and education 70,689 64,302
    Transfers from C.G. 69,408 61,691
    Expenditure by municipalities 2,699 7,772
    Municipal exp. on health & education as% of total 3.8 12.1
    Municipal as % of total "own" exp. (exc. health &edu.) 2.8 7.1
    Municipal investment 35,142 29,259

    Source: Irarrazaval, 1992, p. 120
    World Bank, 1992a, Tables A.3, A.5


    TABLE 6

    Sources of Revenue of Municipalities: 1990
    m. pesos % of total
    1.Taxes, licenses etc. 60,495 34.6
    Property tax 20,429 -
    Vehicle license 11,990 -
    Business tax 14,955 -
    Solid waste 2,763 -
    Other 10,358 57.8
    2. F.C.M.(1) 40,504 23.2
    3. Funds transferred for health/education 63,270 36.1
    4.Other current* 10,684 6.1
    TOTAL 174,953 100.0

    * includes emergency funds to finance deficits
    (1) Fondo Comun Municipal
    Source: World Bank, 1992a


    TABLE 7

    Sources of Funds for Investment: 1990
    m. pesos % of total
    1. Municipalities own financial investment 34,565 16.4
    2.Special Funds:
    Regional Fund 17,485 -
    Neighborhood taxes 12,116 -
    Urban taxes 2,392 -
    Social Fund 481 305
    Sports Fund 305 -
    TOTAL Special Funds 32,799 15.6
    3. "Regionalized" sectoral investment of C.G. 143,350 68.0
    GRAND TOTAL 210,694 100

    Source: World Bank, 1992a
    Irarrazaval, 1992


    TABLE 8

    Decentralization Ratios in Chile
    Year Revenue decentralization on ratio a expenditure decentralization ratio a,b Financial Autonomy Ratio
    (a)
    tax    		 (b)
    total revenue    		 (c)
    exc. H+E    		 (d)
    inc. H+E    		 (e)
    inc. H+E &invst. funds    		 (f)exc. H+E (g)inc. H+E (h)inc. invest. funds
    1977 2.9 2.3 1.9 1.9 n.a. 0.92 0.92 n.a.
    1981 6.3 5.1 4.5 n.a. n.a. 0.91 n.a. n.a.
    1988 8.3 6.0 5.5 8.3 9.8 0.92 0.60 0.52
    1990 7.5 4.7 4.4c 6.9c 8.2c 1.16 0.73 0.62

    Source: Irarrazaval, 1992
    World Bank, 1990a; 1992a
    CEPAL, 1991
    El Fondo Nacional de Desarollo Regional, 1992
    Ministerio de Hacienda, 1992

    Table 8 (cont.)

    Definitions

    (a) Own revenue of municipalities from taxes and FCM as percentage of total "consolidated central government tax revenue."

    (b) Own revenue of municipalities from taxes and FCM as percentage of total "consolidated central government revenue."

    (c) Own expenditure of municipalities excluding education and health as percentage of total expenditure of consolidated central government + municipalities own expenditure.

    (d) Own expenditure of municipalities including education and health as percentage of consolidated central government + municipalities own expenditure.

    (e) Own expenditure of municipalities including education, health and investment funds as proportion of total government expenditure (C.G. and municipalities).

    (f) Own money as a proportion of total expenditure going through budget, excluding health and education. Also excludes investment expenditure through funds.

    (g) Own money as a proportion of total expenditure including health and education.

    (h) Own money as proportion of total expenditure including H and E and investment funds.

    Notes

    a. Data for revenue and expenditure of municipalities was available only at 1990 prices; other data was available at different prices and/or current prices. For 1977-1988, implicit World Bank deflater has been used; for 1988-90 consumer prices in Santiago were used.

    b. The health and education functions were gradually transferred to the municipalities from 1980 - 1987. In (d) the additional expenditure of municipalities is the finance transferred for the purpose by the C.G.; use of own funds for health and education is included in column (c).

    c. C.G. expenditure for 1990 is assumed to include the amounts transferred to the municipalities for H and E.


    TABLE 9
    Sectoral Decentralization Ratios
    Education Health Infra-structure
    (a)
    exc. FNDR    		 (b)
    inc.FNDR    		 (c)
    exc. FNDR    		 (d)
    inc.FNDR    		 (e)
    exc.FNDR    		 (f)
    inc. FNDR
    1977 n.a. n.a. n.a. n.a. 2.2 n.a.
    1988 25.6 27.4 4.2 6.7 24.8 36.2
    1990 20.3 22.0 3.2 4.8 22.9 39.0

    (a) Proportion of general government expenditure on education spent by municipalities including transferred funds and own expenditure.

    (b) Proportion of general government expenditure on education spent by municipalities including 27.5% of FNDR.

    (c) As (a) for health.

    (d) Includes 21.1% of FNDR.

    (e) Municipalities own investment as a proportion of C.G. + municipality investment in housing etc., urban improvement, sport and transport.

    (f) As (e) including 51% of FNDR.

    Notes

    (i) Data for revenue and expenditure of municipalities was available only at 1990 prices and other data was available at different prices and/or current prices. For 1977-1988, implicit World Bank deflater has been used. For 1988-90 consumer prices in Santiago.

    (ii) The health and education functions were gradually transferred to the municipalities from 1980-1990. In (d) the additional expenditure of municipalities is the finance transferred for the purpose by the C.G.; use of own funds for health and education is included in column (c).

    Source: World Bank, 1990a; 1992a,b.
    GFS, 1991;
    El Fondo Nacional de Desarollo Regional, 1992
    Ministerio de Hacienda, 1992


    TABLE 10
    Structure of Municipal Personnel

    1975 1988(a)
    No. % No. %
    Professional & technical 1,632 7.9 7,107 33.0
    Administrative 5,269 25.5 5,586 25.9
    Auxiliary 13,794 66.6 8,871 41.1
    TOTAL 20,695 100.0 21,564 100.0
    No. per 1000 pop. 2.01 - 1.72 -

    (a) Excludes education (103,033) and health (12,204)

    Source: World Bank, 1990a
    Country Development Report 1990


    TABLE 11
    Human Development Ratios

    CONSOLIDATED CENTRAL GOVERNMENT (INCLUDING MUNICIPALITIES)
    1977 1981 1988 1990
    1.Exp. ratio (E/Y)

    Revenue ratio(R/Y)    		 32.0

    30.6    		 29.4

    31.5    		 30.8

    29.5    		 28.2

    29.3
    2.Social allocation ratio (H+E)/E
    of which
    E:
    H:    		 21.4

    14.5
    6.8    		 21.3

    14.7
    6.5    		 15.5[19.9]

    9.8[11.1]
    5.7[8.7]    		 21.1

    11.8
    9.2
    3.Priority ratios E+H

    - Education (pre-primary, primary, secondary)
    - Health (clinics)

    PRIORITY EXPENDITURE as % GDP = [1 x 2 x 3]    		 29.9

    42.5

    3.2


    2.05    		 42.8

    59.8

    4.5


    2.68    		 46.7

    72.7

    1.9


    2.23[2.86]    		 -

    -

    -


    -

    Source: World Bank, 1990a
    G.F.S., 1991
    Ministerio de Hacienda, 1992

    Notes: Data for 1977 to 1988 from World Bank, 1990a and GFS, 1991; for 1988 (square brackets) and 1990, from Ministerio de Hacienda, 1992. The two sets of data for 1988 do not agree.


    TABLE 12
    Human Development Ratios by Level of Government
    1977 1981 1988 1990
    A. CENTRAL GOV'T LESS TRANSFERS TO MUNICIPALITIES
    1. Expenditure ratio 32.0 n.a. 29.9 27.4
    2. Social allocation ratio
    (E+H)/EXP.
    E:
    H:
    21.4
    14.5
    6.8
    n.a.
    n.a.
    n.a.
    13.1
    7.5
    5.6
    18.8
    9.7
    9.1
    3. Priority ratio 29.9 n.a. 0 0
    4. Priority expenditure as % GDP = [1 x 2 x 3] 2.05 n.a. 0 0
    B. MUNICIPALITIES
    5. Expenditure ratio (Me/Y) 0.6 1.4 2.7 2.0a [2.4]b
    6. Revenue ratio (Mr/Y)
    		 0.6 1.3 1.6 1.5
    7. Social allocation ratio (H + E) n.a. n.a. 32.3 37.3
    8. of which E: n.a. n.a. 29.6 33.3
    9. H: n.a. n.a. 2.7 4.0
    10. Priority ratio n.a. n.a. 1 1
    11. Priority exp % of GDP n.a. n.a. 0.87 0.75
    Sources: World Bank, 1990a; World Bank,1992a
    G.F.S., 1991
    Ministerio de Hacienda, 1992.

    Notes: a includes funds transferred for H and E, excl. special funds;
    b includes special funds.


    TABLE 13
    Priority Ratios within Education

    % allocation to:
    1977 1981 1987 1989
    Pre-school 1.8 1.0 7.0 7.7
    Primary 35.6 51.6 51.9 49.8
    Secondary 11.5 18.6 18.1 20.0
    University 42.1 27.8 21.6 21.8
    Other 9.9 1.0 1.3 0.7
    Primary/primary+secondary 75.6 73.5 74.1 71.3

    Source: Raczynski and Romaguera, 1992

    TABLE 14
    Investment Performance
    1977 1981 1988 1990
    A. CONSOLIDATED CENTRAL GOVERNMENT
    Gross fixed investments as % of total Government exp. 9.0 5.2 8.3 9.5
    Gross I as a % of gov't exp. less transfers 9.0 n.a. 8.6 9.6
    Level constant prices,
    1977=100    		 100.0 67.3 132.5 117.3
    B. MUNICIPALITIES
    Invst. as a % of total exp. ex. transfers for H+E 11.6 37.9 46.2 31.7
    Invst. as % of total expenditure inc. transfers 11.6 n.a. 26.0 16.9
    Level of I, constant prices, 1977=100 100 984.5 1,717.5 908.6
    Source: World Bank, 1990a; 1992b
    Irarrazaval, p. 120
    Ministerio de Hacienda, 1992

    TABLE 15
    Relationship Between Education Expenditure per Head
    and Per Capita Income by Region
    Education exp. per capita by region
    1977
    pesos    		 Real GDP per capita by region(GDRP)
    1977
    Pesos    		 % completing primary school
    1977
    pesos    		 % of population less than min. cal. R2 Rank order correlation btwn education exp. per capita and GDRP
    1980 0.015*
    (2.76)    		 - - 0.41 0.41
    1983 0.014*
    (1.89)    		 -39.3
    (-0.7)    		 -18.0
    (-1.0)    		 0.51 0.20

    * Significant at 1% level. (T-values in brackets)

    Sources: Bulnes et al. (1988), World Bank (1992b), Espinola (1991).

    TABLE 16
    Performance in Municipal Schools: 1980s
    Achievement in National Tests
    1982 1988 1990
    Spanish
    All socio-economic groups 58.6 58.4 50.4
    Level A+B 67.0 69.0 58.1
    Level C+D 51.4 47.9 42.7
    Mathematics
    Level Ba 53.4 53.6 56.7
    Level Aa 48.4 47.7 56.7

    a) Unweighted average of different types of municipal school.

    Source: Espinola, 1991; Prawda, 1992

    TABLE 17

    Other Educational Indicators
    1980 1987 1989 1990
    TEACHER'S SALARIES
    real, maximum 100 70.9 - 67.9
    real, minimum 100 77.8 - 41.5
    Student/teacher ratio (primary) 26 31 - -
    Enrolment rate %
    Pre-school 5.0 7.2 - -
    Primary 95.3 96.3 94.6 -
    Secondary 65.0 79.3 81.6 -
    Years to complete prim.& sec. 12.2 - - 10.6
    Repition rates 8.1 6.1 - -
    Source: Espinola, 1991; Prawda, 1992



    TABLE 18
    Health Service Resources
    1977 1981 1988
    Public exp. per person, index 1977=100 100 110.3 104.0
    Share of clinics etc in exp. % 3.2 4.5 1.9
    Exp. on clinics per person, 1977=100 100 155.6 61.9
    No. of hospitals 232(74) - 202
    No. of clinics 142(74) - 369
    No. of posts 719(74) - 1,034
    No. of doctors per 1000 0.43(75) 0.37(80) 0.42(80)
    No. of nurses per 1000 0.17(75) 2.19(80) 0.17(88)
    No. of hospital beds per 1000 3.4 3.1 2.6
    Source: Miranda, 1990; Raczynski and Romaguera, 1992


    TABLE 19
    Health services and outcomes
    Use of services 1975 1980 1988 1990
    Annual consultations
    -adults
    -<15
    0.72
    0.96
    0.86
    1.12
    0.83
    1.50
    -
    -
    %births professionally attended 87 91 98 -
    Immunization per 1,000 490 359 325 -
    Health outcome
    I.M.R. per 1,000 55.4 31.8 18.9 -
    Life expectancy at birth 67.2 71.0 71.8 -
    Maternal mortality 1.22 0.55 0.41 -
    Low birth weight babies 11.6 8.2 6.6 5.8
    Source: Miranda, 1990; Raczynski and Romaguera, 1992


    TABLE 20
    Relationship Between Education Expenditure per Head and Per Capita Income by Region
    Health exp. per capita by region
    1977
    pesos    		 Real GDP per capita by region(GDRP)
    1977
    Pesos    		 % of population less than min. cal. R2 Rank order correlation btwn health exp. per capita and GDRP
    1980 0.012*
    (4.42)    		 - 0.61 0.87
    1983 0.008*
    (2.98)    		 -1.63
    (-0.20)    		 0.69 0.64

    * Significant at 1% level.
    (T-values in brackets)

    Sources: Bulnes, L. et al. (1988), World Bank (1992b), MidePlan (1992).


    TABLE 21

    The Distribution of Public Investment by Region
    Region public works invst. per capita Real GDRP1977 Pesos % complet. prim. school % below min. cals. Size of population R2 Rank order correlation with GDRP
    ALL MUNICIPALITIES
    1980 0.042*
    (4.33)    		 - - - 0.63 0.46
    1983 0.034*
    (2.10)    		 -21.2
    (-0.18)    		 36.9
    (-0.9)    		 - 0.64 0.31
    FNDR
    1980 0.003
    (0.77)    		 - - - 0.13 0.20
    1983 0
    (0)    		 - - 155.3*
    (-4.09)    		 0.67 -
    1986 - -22.5
    (-1.20)    		 -19.4*
    (-2.39)    		 - 0.37 -
    CENTRAL GOVERNMENT PUBLIC WORKS INVESTMENT
    1980 0.013*
    (3.28)    		 - - - 0.49 0.41
    1986 0.012* - - - 0.51 0.10
    1986 - 77.8* (2.88) - 0.42 -

    -: not included in the regression
    * significant at 1% level (T-values in brackets)

    Sources: Bulnes et al., 1988; World Bank, 1992b; MidePlan, 1992; Espinola, 1991.