Natural resources royalties and local development in Colombia

The purpose of this research is to evaluate the hypothesis of differentiated growth in the municipalities of Colombia which receives rents from exploitation of non-renewable natural resources in comparison with the rest of the country. A specific strategy is to estimate the empirical evidence for the producers regions of coal and oil and also use techniques related to impact evaluation, specifically the difference – in difference estimator (diff-in-diff) which compares the evolution of the economic activity into the regions affected by the royalties’ source of rents with the unaffected ones. An important aspect of this assessment is the legislation based on constitutional guidelines, represented in the law No 141 of 1994, which state the main structure to capture, distribute and invest royalties’ rents. This point of reference is important in terms of evaluate impact, before and after the event.