PLANNING FICTION AND FISCAL DEPENDENCE IN THE AUTONOMOUS GOVERNMENTS OF BENI AND PANDO (2010-2025)

Abstract

The model of autonomy and fiscal decentralization in Bolivia is based on the premise of a progressive capacity for self-financing by the Autonomous Territorial Entities (ETA), under the assumption that institutional strengthening would lead to higher levels of local revenue collection. However, empirical evidence shows that in the Autonomous Departmental Governments (GAD) of Beni and Pando, there persists an almost absolute structural dependence on transfers from the central government (CG), which calls into question the viability of the model in contexts of low economic density and a limited tax base. Within this framework, this research examines whether the reduced local revenue collection is due to “fiscal laziness”—associated with distortions in institutional behavior due to the transfer system—or to a “structural incapacity” linked to productive and territorial constraints, and how this dichotomy distorts the budget cycle in the period 2010–2025.

Methodologically, a comparative longitudinal analysis is used, complemented by an econometric panel data model with fixed effects. This model also incorporates contextual variables such as the level of tax revenue in both departments and the volatility of tax income. The study contrasts the four accounting stages of public spending—approved, modified, accrued, and paid—revealing that the systematic gap between the approved and modified budgets constitutes a “planning fiction,” with deviations exceeding 50%, thus undermining the credibility of the budget as a planning tool. Furthermore, the persistent discrepancy between accrued and disbursed expenditures reveals a liquidity crisis, associated with both delays in transfer flows and limitations in subnational financial management.

Consequently, it is concluded that the current regulatory framework, far from promoting fiscal autonomy, introduces institutional rigidities that restrict the room for maneuver of subnational entities, forcing them to prioritize the sustainability of current expenditures—mandatory expenditures established in the budget formulation guidelines issued by the Public Finance Authority—at the expense of public investment. This finding suggests the need to rethink the fiscal incentive scheme, move towards a new fiscal pact that recognizes territorial heterogeneity, and strengthen the management and revenue-generating capacities at the subnational levels.