EL FONDO COMÚN MUNICIPAL: ¿Cuál es su rol en la convergencia de ingresos locales?

This article discusses the relation between the Municipal Common Fund (Fondo Común Municipal, FCM) and the convergence in municipal income in Chile between 2001 and 2011. Using quasi experiments and dynamic equations, we demonstrate that this decentralization instrument does not have a significant effect on the speed of convergence. The weak development of decentralization and the low incentives for municipalities to obtain their own sources of financing could promote strategic behaviors that distort the redistributive effect of the FCM for municipalities. That fact would decrease the impact of the FCM in reducing regional disparities in Chile. [ABSTRACT FROM AUTHOR]