The government budget: An approach to transfer and investment

Abstract

This paper explores in detail the transfer and investment components of the General Budget of the Nation, whose composition is complex to evaluate due to the nature and variety of its items. For the study of these items, the literature on the political economy of the budget and the budget process in Colombia is considered. The transfer and investment items represent about 60% of the General Budget and have great inflexibility of public spending, due to the diversity of appropriations with legal backing, especially in the transfer’s item. The investment is made up of a wide range of social programs, subsidies, and infrastructure projects, which in some cases correspond to commitments acquired in previous terms, through the so-called future terms. The rigidity of the budget deepens with the frequent approval of laws that generate additional spending on a temporary or permanent basis.