Case study on the performance of Bogotá 1990 2007

PERFORMANCE OF BOGOTÁ AND CITY GROWTH 1990-2007

Case Study

June 4, 2007

Prepared by:
Jorge Hernán Cárdenas S.
Johana Jimenez
Jorge Barriga

June 2007

TABLE OF CONTENTS
Executive Summary……………………………………………………………….. 1
Chapter 1
Decentralization in Bogotá ……..…………………………………. 6
1.1 Administrative Decentralization …………………………………….……… 7
1.2 Political Decentralization …..……………………………………………….. 11
1.3 Fiscal Decentralization ……………………………………………………… 12
1.4 Citizen participation and social control ……………………………..………. 17
Chapter 2 Best Practices in Bogotá as a Result of Decentralization ……… 18
2.1 Design and Implementation of an Integral Policy for Safety and security..18
2.2 The efficiency of public finance management …………………………… 19
2.3 Definition and development of a long term urban city model …..………. 21
2.4 Mobility Strategy …………………………………………………………… 22
2.5 Recovery and development of public space ………………………………. 24
2.6 The revolution in Education Management …………………………………. 26
Chapter 3 Structure and Economic Performance of Bogotá ………………… 29
3.1 Economic and industrial profile …………………………………………… 29
3.2 Evolution of Industry Structure ……………………………………………. 30
3.3 Economic growth with respect to the country …………………………… 31
3.4 Economic performance of Bogotá and its more dynamic economic sectors
3.4.1 Productivity ………………………………………………………... 32
3.4.2 Employment generation ……………………………………………. 34
3.4.3 Creation of new firms ...……………………………………………. 35
3.4.4 Trade …………………………………………………………………. 36
3.4.5 Most Dynamic Productive sectors ……………………………….. 39
3.5 Bogotá and its economic structure – conclusions .......………………….. 41
Chapter 4 Drivers of Economic Performance and Competitiveness ………..43
4.1 Mobility - Transportation ………………………………………………………43
4.2 Public safety ……………………………………………………………………48
4.3 Access to Housing ………………………………………………………….51
4.4 Education ……………………………………………………………………….56
Chapter 5

Institutional Environment for Competitiveness …………………….58

List of Figures
Figure 1: Some Milestones of Bogotá …………………………………………… 7
Figure 2: Key Issues Emphasized by Bogotá Mayors 1988-2007 ……………. 8
Figure 3: Participations in the General Transfers System –SGP- …………….13
Figure 3A: Taxes collected by Bogotá …………………………………………..14
Figure 4: Intergovernmental transferences from the Nation to Bogotá Capital
District ……………………………………………………………………………..15
Figure 5: Direct investment in Education in Bogotá (Millions of pesos)……….15
Figure 6: Direct investment in the Health in Bogotá (Millions of pesos) …….15
Figure 7: Composition of total resources of Bogotá …………………………….21
Figure 8: Composition of total expenses of Bogotá ……………………………21
Figure 9: Bogotá’s GDP composition by sectors in 2003 …………………….30
Figure 10: GDP Growth in Bogotá and Colombia 1990-2005 ………………….32
Figure 11: GDP per capita in constant US$ of 1994 …………………………….33
Figure 12: GDP per occupied person, 1999 and 2005 ………………….……..34
Figure 13: Employed population 1996-2005 ……………………………………35
Figure 14: Unemployment rate 1996-2005 ……………………………………….35
Figure 15: Unemployment Rates in Latin America, 2005………………………..35
Figure 16: Number of companies created and liquidated yearly, and
net annual addition of firms in Bogotá 2000-2005 ….…………………………..36
Figure 17: Total Share of Bogotá-Cundinamarca region in the commercial
flows of Colombia (imports and exports) during the period 1991-2003 ….…….36
Figure 18. Total Exports of Bogotá-Cundinamarca region during 1991-2003 ...37
Figure 19: Bogotá-Cundinamarca: Main 15 export products, sectors
using CIIU (4 digits), average 1991-2003 ...……………………………………..37
Figure 20. Imports growth during the period 1991-2003 ……………………….38
Figure 21. Bogotá-Cundinamarca: Main 15 import products, sectors
using CIIU (4 digits), average 1991-2003, Rev 2 …………………………………38
Figure 22. Main destinations of Bogotá-Cundinamarca region exports,
average periods considered 1994-1998 and 1999-2003 …………………………39
Figure 23: Concentration of firms dedicated to higher education by locality ....40
Figure 24: Concentration of healthcare firms by locality
...…….……………40
Figure 25: Concentration of financial intermediation firms by locality ………….41
Figure 26: Concentration of firms dedicated to tourism by locality …………..41
Figure 27: Concentration of telecommunications, transportation,
and storage firms by locality …..……………………………………………………41
Figure 28: Concentration of firms dedicated to retail by locality …..……………41
Figure 29: Transmilenio scope ……………………………………………………43
Figure 30: Coverage of bicycle route network ………….………………………44
Figure 31: Road network conditions in Bogotá 2005……………………………..44
Figure 32: State of the Network of roads by component in Bogotá 2005………45
Figure 33: Cost of transportation in Latin American cities……………………….46
Figure 34: Rates charged to international passengers, 2003 -Main
Latin American cities ……………………………………………………………….47
Figure 35: Airport costs in Latin America, 2003 ………………………………….47
Figure 36: Homicide rate per 100,000 inhabitants in Bogotá……………………49
Figure 37: Number of Robberies in Bogotá, 1999-2004…………………………49
Figure 38: Homicide rates per 100,000 inhabitants in Latin America, 2005 …50
Figure 39: Housing Deficit in Bogotá………………………………………………51

Figure 40: Access to water in Bogotá 1993-2005………………………………..53
Figure 41: Sanitary sewage coverage in Bogotá 1993-2005……………………53
Figure 42: Perceptions of housing availability 2004-2005……………………….54
Figure 43: Office space rent prices in Latin American cities…………………….55
Figure 44: Apartment rent prices in Latin American cities……………………….55
Figure 45: Gross coverage rate of primary and secondary education………….56

List of Tables
Table 1: GDP by sectors in Bogotá 1990-2003 …………………………………..31
Table 2: GDP Growth in Bogotá and Colombia 1990-2005 ………………….32
Table 3: GDP per capita Bogotá, Antioquia, and Valle ………………………..33
Table 4: GDP Growth by service sector 1990-2003
(millions of constant 1994 pesos) ……………….………………………………..39
Table 5: Times of travel in Bogotá in minutes 2000-2005……………………….44
Table 6: Transportation and GDP in Bogotá, 2000-2005........................………47
Table 7: Km of Transmilenio routes and GDP of Bogotá ………………………48
Table 8: Transportation and occupied population in Bogotá 2000-2005……….48
Table 9: Transportation and firm creation in Bogotá 2000-2005………………..48
Table 10: Safety and per capita GDP in Bogotá, 1993-2005 ………………….50
Table 11: Safety and firm creation in Bogotá, 2000-2005 ………………………50
Table 12: Evolution of the housing stock in Bogotá 1988-2005…………………52
Table 13: Average area per unit of Low-Income Housing
in Bogotá, 2001-2005 ……………………………………………………………...55

Executive Summary - Bogotá –

This report has been prepared under the guidance of World Bank Staff in a
wider project dedicated to understand “Institutional Factors that Explain
Performance in Three Key City Services: the case of four Cities in Latin
America”. The project concentrates on the cases of Bogotá, Santiago, San
Salvador and Sao Paulo. This report covers particularly the case of Bogota.1
Bogotá is a very interesting city case, despite its medium-low income level.
Recently, Bogotá has gained some international reputation for a number of
institutional innovations related to city management and public service delivery.
The city has gained international awards and recognition in many areas, like
public finance management, transportation, basic education, environment, local
public libraries, among others. Bogotá has also gained attention for its
accountability and performance evaluation systems run primarily by the private
sector. The city has undergone numerous changes in many areas; some of
those now serve as reference for other cities in Colombia and Latin America.
Taking into account the recent innovations in Bogotá, The World Bank is
interested in assessing the evolution of the city’s performance and economic
growth and determining if Bogotá’s city growth and GDP per capita has
changed significantly over the last two decades. The research question posed
is to understand how relevant the provision of local goods has been for
Bogotá’s growth; particularly, the provision of pure local goods, like
transportation and mobility strategies, public safety, and availability of housing
and public space.
The study also acknowledges the importance of institutional factors, such as
fiscal and political decentralization schemes, metropolitan governance, zoning,
and other laws and regulations that have an incidence on city growth. Although
not very conclusive evidence is available on those grounds, there are some
indications of the positive incidence of these public goods and institutional
factors in city growth.
Bogotá has 16% of the Colombian population and 22% of the national GDP;
therefore, the ratio of GDP to total population is 1.375. This is still very modest if
one compares Bogotá with Sao Paulo –a city that has 8.6% of population of
Brazil and produces 36% of national GDP, resulting in a GDP to total population
ratio of 4.20. On the other hand, Mexico City has 14.2% of the population of
Mexico and 33.6% of National GDP. The above indicates that Bogotá has more
expected opportunities for city growth in terms of GDP, pointing to the
importance of studies that shed some light on the dynamics of economic growth
within the city and the opportunities available.
Several authors note that productive interaction among people promotes
innovations; innovations spur productivity and lead to increases in GDP. The
1

The report was prepared in Bogota, by Jorge Hernán Cárdenas S., Jorge Barriga and Johana Jimenez, and was
supervised by Mila Freire, Fernanda Ruiz, Ming Zhang, Fernando Rojas, Jonas Frank.

1

more qualified and connected people are, the easier it is for everyone to work,
cooperate, trade, and communicate. All things being equal, Bogotá will have
more “Knowledge spillovers” if the city is better prepared to provide
opportunities for qualified interaction at a very low cost2. This is related to
housing conditions, mobility costs and citizen safety.
Therefore, the key question is to what extent people have the ability to interact
productively in the city. Can people securely, comfortably, and rapidly
congregate and work? Is the city taking advantage of economies of
agglomeration? To what extent is there evidence that key pure localized public
goods available in the city provide dynamic externalities that activate the engine
for city growth?
We need to examine the productive gains derived from the geographic
concentration of industries and people. Is the city designed in such a way that
people and the city extract more rents from the geographic interaction of
industries?
Some important questions come to mind in this regard: Does the city save
resources because of good urban planning and zoning? Is the city providing
needed public local goods that have the potential to expedite qualified
interaction? Does Bogotá carefully create and distribute the burden of cost of
shared infrastructure among many industries and among different generations?
Does the city provide opportunities to increase the number of qualified people?
Has the city reduced labor recruitment costs? Is the city committed to the
reduction of transportation costs?
Thus, there are numerous questions inquiring to what extent Bogotá is
capturing all the benefits that come from agglomeration, and if the city is
providing enough of the public goods that bring the positive externalities of city
growth. Does the city present evidence of negative externalities associated with
not very well planed city growth?
These are some key and inspiring questions for Bogotá that would allow the city
to take a very different look at its development process. Not all of them can be
answered in this initial study, due to limitations in time and available data. Yet, it
is important to persevere in the area of understanding more carefully the
dynamics of city growth.
In this report, the authors decided to begin with the presentation of information
related to Bogotá’s political and administrative decentralization and governance
schemes. This is the subject of Chapter 1, and covers detailed information on
how is the city organized. Chapter 2 presents some best practices of the city in
areas as different as safety management, pubic finance, urban model, mobility
strategy, management of public space, and basic education management
strategies.

2

See for example, Mila Freire and Mario Polese, Connecting Cities with Macroeconomic Concerns: The missing Link.
Institute Nationale de la Recherche Scientifique. Montreal, Quebec, and The World Bank, 2003.

2

Chapter 3 presents information and analysis regarding Bogotá’s economic
structure and city growth. Initially, sectors that have grown since 1990 and
others that are eroding or diminishing their relative importance are presented.
A very interesting point in Chapter 3 is to examine the geographic location of
key industries, to see if there is any evidence of geographical concentration and
productive agglomeration. Concentration is evident in sectors like retail,
telecommunications, health, education, tourism, and financial intermediation;
these last four industries exhibit high levels of geographic concentration, which
could indicate their consolidation as clusters and the generation of cluster
economies.
Another important point of this chapter is to explain the relation of Bogotá’s
economic cycle with that of the nation, and reaching one simple conclusion:
Bogotá’s economy is clearly more volatile. In periods of national expansion, the
city’s growth is higher than that of the country, while crisis are felt harder in the
capital city than in the rest of the nation. There is no conclusive explanation of
the reason for this phenomenon, but it is clear that this volatility notably affected
Bogotá’s economy during the national crisis of 1999, when the city’s growth
plummeted; there was an important reduction in productivity –measured in per
capita GDP-, and an obvious increase in unemployment rates. Although the
effects of the crisis are still visible, the recovery of the city’s economy since the
year 2000 is evident, as demonstrated by the acceleration of productivity, the
continuous decline of unemployment rates, and a consistent creation of new
firms.
An additional conclusion of Chapter 3 is that Bogotá is the most relevant city of
Colombia in economic terms, since it makes the largest contribution to the
National GDP and generates the most employment. Although the city’s
industrial structure has not changed radically in the past 15 years, there is
evidence of a gradual consolidation of Bogotá as a service economy. Service
industries account for approximately of 77% of wealth creation in the city. In
contrast with the industrial sector, services have increased their participation in
the city’s GDP.
Once we acknowledge that the city is a service economy, we have to clearly
conclude that human capital and human interaction is the main productive
resource of the city, and the ease and efficiency of its use, as well as the
improvement of its knowledge base, are the determinant factors for economic
performance. Therefore, citizen safety and mobility strategies are fundamental
for elevating the productive base of the city.
The Transmilenio system of public transportation, the creation of a network of
bike routes, as well as programs to dissuade the use of private automobiles,
and measures to decrease the level of congestion –such as “pico y placa”- have
all contributed to reduce the time of transportation and to promote the use of
public transportation, while also improving the quality of life of the citizens of
Bogotá. Approximately 80% of the passengers rely on public transportation, and
the Transmilenio system has reduced transportation time by 32%. As a result,
the city is more efficient with its human resources and promotes greater mobility

3

of goods and knowledge within. We expect these strategies undertaken by the
city to have some incidence on growth.
Although Transmilenio has achieved notable improvements in mobility within
the city and it is cited internationally as an example of good practice, Chapter 3
also points out that the system faces important challenges in terms of
transportation, since it must coexist with a traditional collective public
transportation system which is disconnected from Transmilenio; the costs of
maintaining two separated system is very high.
Although there is still room for improvement in the area of citizen safety, there
has been sustained progress over the past decade. The most important
characteristics of its development at the institutional level include: (i) the
Mayors´ leadership and the institutional organization they have assigned to the
topic; (ii) the implementation of a public, reliable, useful, and credible
information system; (iii) the advancement of programs related to citizen culture;
and, (iv) the technical strengthening and the reinforcement of the infrastructure
of the Metropolitan Police. Progress in issues related to safety has had a
definite impact in the city’s performance, especially in three areas: foreign direct
investment –FDI-, worker safety, and the sense of fully belonging and
participating in all the city activities.
FDI has increased over 128% during the past decade. In addition, relevant
sectors for tourism such as hotels and restaurants have benefited from a
greater influx of visitors to the city, as a result of a better perception of security.
In addition, with greater safety and lower perception of crime it seems
reasonable to think that the possibility for citizens to move around and enjoy the
city calmly, allows firms to exhibit higher levels of productivity, due to reduced
stress of the workforce, and a decrease in the levels of job absenteeism. An
increase in safety also provides inhabitants with greater opportunities to interact
with the service economy in commerce, restaurants, banking, and all of the
service industry.
A large part of Bogotá’s economy is based on the delivery of services, and
some of these –such as hotels, restaurants, healthcare, and education- require
close interaction with the client. When workers and consumers perceive that
“the city takes care of them”, they have a greater disposition to interact together.
In terms of access to housing, it is more difficult to reach conclusions in this
research, especially due to the lack of prolonged time series that may allow
some type of inference of its impact in the city’s performance. First, the
reduction of the housing deficit solves a basic need –having a “roof”-, and frees
people to direct their resources to the consumption of goods from other sectors,
promoting growth. The reduction of the housing deficit has had a similar effect
as that of increased safety in economic performance, since it creates
appropriation of the city and improves the quality of life of its citizens. Second, it
was only recently that the private sector decided to build low-income housing,
thus reducing the participation of illegal builders. As a result, the city has saved
critical resources, since the cost of providing public services and utilities to

4

illegal neighborhoods is, in average, 160% more expensive than doing so in a
legally planned urbanization.
Bogotá as capital district reports a series of milestones at the political,
institutional, and fiscal levels, that have positively affected its transformation and
development, converting it into a reference of good practices at the national and
Latin American levels. Three key aspects include: (i) in 1945, the city became a
district; (ii) in 1954, six neighboring municipalities were annexed to Bogotá,
which improved the city’s governance, surpassing the territorial divisions. In that
same year, the city was divided into zones administered by Local Mayors; and,
(iii) the Constitution of 1991 granted the city a special status among all the
municipalities of Colombia.
The main institutional milestone of Bogotá, from the administrative point of view,
is the popular election of mayors. Likewise, the increase of the mayor’s period
of government from two to four years has promoted the development of long
term plans and projects proposed in the campaign programs, independently
from the President of the Republic and his political party. The Organic Statute of
Bogotá (Law 1421 of 1993) -adopted after the Constitution- clarified the
competences and limits of key actors, like the city council and the mayor and
his cabinet. From the political standpoint, the redefinition of the relations
between the City Council and the Mayor stands out. These are now centered on
the search of greater transparency and stronger institutions, aiming to increase
governance and giving priority to the common interest. Thus, the City Council
has become a regulatory organ instead of a co-administrator of the city. On the
other hand, national fiscal transferences to the city provided more stability to
local public finance and increased resources for the city.
Finally, the localities require further reform, since some authors argue that those
units lack clear functions. From the institutional standpoint, although the city has
made progress in the decentralization process, Bogotá still faces important
challenges for its future evolution, among them: (i) the coexistence of functions
between the Mayor and the City Council related to the organizational structure
of the city government; (ii) the localities are defined as administrative entities
which lack practical meaning for the citizen; and, (iii) the Local Mayor Offices in
each of the 20 localities of Bogotá are not recognized as entities, and the
functions assigned to the local mayors in terms of planning, and execution are
restricted.

5

CHAPTER 1
DECENTRALIZATION IN BOGOTÁ
“Like many large Latin American cities, in the past decades Bogotá has
undergone numerous demographic and spatial changes. In the past half
century, the city’s population multiplied by a factor close to ten, growing from
750,000 inhabitants in 1951 to close to seven million at the beginning of the
twenty-first century. The constructed area grew somewhat less rapidly in these
decades, from approximately 4,000 acres in the beginning of the 1950s to close
to 29,000 in 1996… in 1990, the city housed nearly one third of all the
automobile dealers, financial and business services establishments, close to
two fifths of real estate agencies, and one fourth of the country’s educational
and health establishments (Gouëset, 1998). In 1998, Bogotá produced 20% of
the country’s GDP, 25% of the national manufactured value added, and even
larger proportions in sectors such as communications and finance (Cuervo,
1992)”3.
Figure 1 shows a number of political, administrative and financial milestones in
the city’s life. Bogotá was the Nation’s capital and capital of the Department of
Cundinamarca by 1905. In the Constitutional reform of 1945, the city becomes a
District. Six new municipalities are annexed to the city in 1954, creating only
one metropolitan authority for the whole city. The neighboring municipalities
annexed to the new territorial entity, the Special District of Bogotá, were: Suba,
Usaquen, Fontibón, Engativa, Bosa, and Usme4. The first popular mayor
election is held in 1988. Successful privatization of garbage collection is
attained in 1989, which was important in allowing more private participation in
the public utilities of the city, such as energy in 1997. A new Constitution is
sanctioned in 1991; as part of the development of the Constitution, the new
Organic Statute of the city –which defines fundamental rules of Bogotá’s
governance-, is issued in 1993. In 1995, successful programs are launched to
promote and build citizenship culture --“hora zanahoria”, “respect of the
pedestrian”, and many others-- that immediately gain popular acceptance. The
company in charge of electric energy is capitalized in 1997, avoiding a financial
crisis, and launching the presence of a strategic and experienced private
manager operator, which holds 49% of the company’s shares and controls
energy generation (Engesa) and distribution (Codensa). The Transmilenio
model of public transportation and the school concessions begin in the year
2000. The Plan for Territorial Ordainment is defined in 2002 and new social
programs -such as “Bogotá without Hunger”, among many others- are launched
in 2003. One could say that modern Bogotá has been built from all these very
complementary and indeed different experiences. Since the popular election of
City Mayor in 1988, each administration has brought different questions and
different emphasis to the city; all of them have added a net gain to the city.
3

Cepeda, Ulloa Fernando, compiler. Las Fortalezas de Colombia. Inter American Development Bank, IADB. Bogotá,
2004. p. 418
4
Decree No. 3064 of 1954, which develops the Constitucional text of 1945 and allows the conformation of Bogotá as a
Special District.. In: Ordóñez Matamoros, Gonzalo. Alcaldía Mayor, Universidad Externado de Colombia. p. 40-41

6

7

Constitution of
1991

1991

1995

Expedition of
the Organic
Statute of
Bogotá
(Ley 1421 de
1993)

1992

1909

1945

Constitutional
Reform

Construction of
de Cicloroutes

2000

Ambitious Use of public space

Codensa
Engesa Reform

1997

Transferences
constitutional
Reform

2001

2002

1990

2006

Creation of
Economic
Development
Secretary
New Schools run
by the city are built

2004

2005

Bogotá
without
hunger and
poverty
alleviation

2007

First popular
election for
Mayor of
Bogotá

1988

Privatization
EDIS

2002 First
PCS mobile
Operator
with ETBEPM
alliance

Six
Municipalities
are annexed to
Bogotá

1954

Transmilenio for Public Transportation
Transport
massive solution
Educational
ss
concessions
Energy utility
company
capitalized by
private investors
1998

Bogotá is
integrated with
State of
Cundinamarca
without losing its
ties to the
national
government

Number of
Innovations in citizen
culture programs

Special
organization of
Bogota as a
Capital

1905

Acuerdo 2 of
1992,
20 localities were
adopted

1991

1900-1905

Bogotá
becomes a
Capital District

1900

Some Milestones of Bogotá

8

Education
Health care

Road
infrastructure
construction

Refuse
collection
privatization

5. Urbanism
and
productivity

6. Legitimacy
and
institutional
efficiency

Citizen
security
campaigns
Centers for
Immediate
Attention
(CAI)
Invader
Ejection
Express lanes
for buses

4. Social
progress

3. Public
space

Key Issues
1. Citizen
culture
2. Security
and
coexistence

Bogotá
1988-2007

Andrés
Pastrana
(1988 – 1990)

General
Benefit
valuation
New
Constitution

Several
Vehicular
bridges

NQS
Expressway
Express
lanes for
buses

Work with
localities

Juan Martín
Caicedo F.
(1990 – 1992)

(tax
modernization:
ICA and Predial)

Organic
Statute for
Bogotá
Fiscal
reorganization

Park recovery

Police
modernization
Face narcoterrorism

Jaime Castro
(1992 – 1995)

Antanas Mockus
( 2001 – 2003)

“For the Bogotá we want”

Institutional
Legitimacy
Private partners
for the Energy
utility institutional

Urban
Productivity

Social Progress

Environment
Public space

Urbanism and services
Mobility (transportation)
“Pico y Placa” program
Transmilenio
Bike-routes
Mega-libraries
Recovery of public
space
Institutional efficiency

Social interaction
Schools by concession

City at urban scale
Poverty reduction
(Desmarginalización)

Admirable public
administration

Social justice
Education
Family and
childhood
Productivity
Mega-libraries

Environment

Citizen culture
(rules)

“To live all on the
same side”

Enrique Peñalosa
( 1998 – 2000)

Plan Objectives
Citizen culture
Egalitarian city model
(values)
Security and
“Hora Zanahoria”
coexistence
program
“Hand the keys”
program

“City Formation”

Antanas
Mockus, Paul
Bromberg
(1995 – 1997)

Development Plans

Figure 2: Key Issues Emphasized by Bogotá Mayors 1988-2007

Administrative
decentralization
Institutional reform

Nourishment safety
Equity in education
Construction of new
schools
Productive Bogotá
Secretary of
economic
development

Environmental
sustainability

Security and
coexistence

“Bogotá without
indifference”

Luis Eduardo
Garzón
(2004-2007)

Two particular historical facts, the category of district reassured to the city in
1945, and the annexation of the six municipalities in 1954, are important
milestones which allowed the city to act in an integral way, surpassing territorial
divisions, and providing a special framework for action. A historical curiosity is
that the annexation of the neighboring municipalities to Bogotá in 1954 was an
autocratic decision of the “state of exception” during the government of General
Rojas Pinilla, the only government that was not democratically elected in the
past century.
“Bogotá stands out in comparison with other large Latin American cities, for
having excellent natural resources, and also because the city has been
governed almost completely for more than 50 years with only one administrative
entity”5. This situation offers obvious advantages, since it limits the clash of
competencies among territorial entities, and poses the conditions for greater
coordination in government functions; thus, the city can assume the production
of metropolitan goods with greater leadership. This is true in the case of
metropolitan transportation, major public investment like the provision of local
public goods, and public utilities.
Moreover, the Legislative Decree 3640 of 1954, issued under “estado de sitio”,
is important because it defines Bogotá as a Special District, not subject to the
ordinary regime of municipalities. Later, the Constitution of 1991 (Chapter 4,
articles 322 to 327) reinforces this special regime of Bogotá, which theoretically
grants the city greater prerogatives, not all of them already regulated or
exercised.
Figure 2 highlights some of the key programs or strategies undertaken by the
past six city administrations. It has been fortunate for Bogotá that all of them
added relevant dimensions for city progress and city growth. Some of these key
ideas later prove effective for the city. More than one good and inspired
administration, one could easily say that after popular election came into place,
Bogotá has had several good and proven administrators, some coming from the
political arena, and others from academia. For the past 20 years, city mayors
have continued the legacy of city reform and city modernization. As noted in
Figure 2, the period of mayors has passed from two to three years, and finally,
after 2002, the period increased to four years.
1.1

Administrative Decentralization

The central sector of the administration consists of the mayor’s office, with its
Secretaries and administrative departments. The decentralized sector consists
of: (i) the public establishments, whose function is to execute specific
investments in different sectors; (ii) the Industrial and Commercial Enterprises,
dedicated mainly to the delivery of public utilities, and whose income is derived

5

Op. Cit., Cepeda, Ulloa Fernando. p. 428

9

from the tariffs charged for such services6; (iii) the Public utilities; (iv) the Social
State Enterprises, consisting of 22 hospitals; (v) the Public Societies; and, (vi)
the Transportation Terminal as a society of mixed economy7.
At the central level, the collegiate instance is the City Council, supreme
authority in the district, with normative authority and authority for exercising and
demanding political accountability of the administration. Other functions are:
holding meaningful debates for the city and approving the development plan at
the beginning of each administration. The City Council is also responsible for
approving local taxes and the city annual budget. The Council consists of forty
council members (“concejales”), elected by popular vote for four year periods8.
With the expedition of the Organic Statute of Bogotá in 1993, the city confirmed
its 20 localities. Local mayors are named by the City Mayor, who selects from a
list of three candidates proposed by the Local Administration Boards –JAL. This
is a post of discretional appointment and removal by the City Mayor. Local
mayors´ offices are the administrative bodies of localities9. At each of the 20
localities of Bogotá, the Junta Administradora Local –JAL-, are the collegiate
instances, formed by “ediles”, who are elected by popular vote on the same day
as the council members, and who are empowered to distribute and assign the
sum of money assigned to each locality in the yearly budget.
The division of Bogotá in 20 localities did not obey to a precise territorial division
in the context of decentralization, nor was it done according to careful study.
Fundamentally, as one of the mayors involved notes “although they were not
defined with the purpose of converting them into localities, and almost certainly
they do not correspond to the definition of localities, …, (the fact is that) people
already identified them, knew their limits, and accepted them, and therefore,
Agreement 2 of 1992 … adopted these 20 localities”10.
Some district administrations have considered it important to work at the level of
locality, while others consider it less functional to work with these instances and
actors arguing that resources could be dispersed and that it is not clear if it
could help city governance.
The decentralization process of Bogotá poses important challenges at this level.
An expert in city topics noted the following with respect to the fragility of the
organization at the locality level:

6

Rojas Lopera, Alexandra ; Gutiérrez, Javier Alberto. Descentralización fiscal y financiamiento de la inversión en
Santafe de Bogota D. C. 1990 – 2001. Secretaría de Hacienda, Alcaldía Mayor de Bogotá. Santafe de Bogota, January
1999.
7
“Estatuto orgánico de Santafé de Bogotá, D.C.”. Decree 1421, 21 July 1993. Colombia. Santafé de Bogotá: Alcaldía
Mayor, 1993. Title IV. Government and Administrative Organization, p. 22
8
Op. Cit. Ordóñez Matamoros, Gonzalo, p. 268
9
Usaquén, Chapinero, Santa Fé, San Cristóbal, Usme, Tunjuelito, Bosa, Kennedy, Fontibón, Engativá, Suba, Barrios
Unidos, Teusaquillo, Los Mártires, Antonio Nariño, Puente Aranda, La Candelaria, Rafael Uribe, Ciudad Bolívar, and
Sumapaz
10
Castro, Jaime. La descentralización es política. Documento presentado en: La descentralización en Bogotá: Últimas
cuatro administraciones dialogan con la administración de Luis Eduardo Garzón. Evento del proyecto Hacer público lo
público, mayo 4 de 2005, Cámara de Comercio de Bogotá. Proyecto interinstitucional desarrollado por: Fundación
Corona, Personería de Bogotá, Universidad Nacional de Colombia.

10

i) “The lack of definition and the inconsistency between the functions
assigned to localities and the attributions and resources effectively
assigned to them.
ii) The “municipalist” framework tends to be replicated in localities, without
seriously considering the existing differences between the global city
ambit and the specific locality environment, …, and
iii) The lack of formal organization for local mayors´ offices and the
concentration of decision-making in local mayors, with few if any
possibilities to delegate to people who report to them…;
iv) The greater part of the present localities has more than 350,000
inhabitants, with a socio-economic heterogeneity similar to that existing
in any large municipality of the country. Such size and heterogeneity
make it very difficult to achieve an identity, which in turn makes the
processes of “citizen formation” and “collective learning” difficult to
achieve".11
In summary, Bogotá is a model in the organization of the offices of the City
Mayor, and has attained important achievements, but these results are less
clear at the level of local mayors´ offices and their twenty localities.
1.2

Political Decentralization

The election of Mayors by popular vote beginning on 1988 represented a
notable change in the life of the city. Having fixed periods for the mayor and the
existence of a programmatic vote –which forced candidates to present their
government plan during the campaign, and to comply with it- were large
accomplishments. In addition, the Constitution of 1991 created the possibility of
revoking the mandate, as a way to return power to the citizen and to make
him/her more active in following-up on the administration.
Since then, the importance of mayors has grown. The period of government has
increased from the initial two years in 1988, first to three years as a
development of the New Constitution of 1991, and recently to four years, as a
result of a constitutional reform, the Legislative Act 02 of 2002. This is a clear
and positive indicator of the affirmation of municipal culture in the country.
Lengthening the period of government has facilitated the development of plans
and projects of greater scope and longer reach. Another accomplishment of the
popular election of mayors and the introduction of the ballot card (tarjetón) was
that it allowed candidates with opinion vote, but without political machinery, to
reach this important position. This has attracted to politics individuals who know
the city well, and who are in general better qualified to represent the electorate,
than several previous mayors (Dávila and Gilbert, 2001; Pizano, 2003) 12. An
11

Silva Bautista Jaime. In: La Descentralización en Bogotá: Una visión prospectiva. Fundación Corona. Bogotá. 2000.
p. 13
12
Op. Cit., Cepeda, Ulloa Fernando. p. 428

11

additional interesting aspect brought on by the popular election of mayors was
their greater independence in relation to the political affiliation of the President
of the Republic. Since 1988, only two of the seven City Mayors of Bogotá have
belonged to the same political party as the President of the Republic, two have
declared they are politically independent, and the present mayor belongs to a
coalition of leftist parties, with a very different political affiliation from the
President13.
Before the Constitution of 1991, the political relations of the city were
characterized by a certain subordination of the Mayor to the District Council14.
The Constitution established a prudent period of time to issue the special
regime of the Capital District. In June 1993, two years after the approval of the
Constitution, the Organic Statute was issued by means of a Decree-Law, and
established clearer and more transparent institutional parameters to rule
Bogotá15.
The Organic Statute had a direct effect in the political relation between the
central administration and the City Council in several respects, among which
are the following: (i) the city council members are paid daily fees for their work,
up to 20 working days per month, never exceeding the salary of the mayor; (ii)
members of the city council are not allowed to participate in any board of district
entities, clearly separating them from direct involvement in executive affairs; (iii)
localities and their boards –JAL- are better defined, with clearer functions; (iv)
the functions of the City Mayor and the City Council are better defined,
specializing each actor and avoiding the invasion of competences16.
The Statute eliminated the Council’s interference in administrative aspects,
especially by prohibiting the participation of council members in the Boards of
district companies17. Moreover, the Statute eliminated a certain dependence of
the recruiting system of high level personnel and the council members, and
introduced a re-definition of planning processes to increase transparency,
visibility, and public responsibility18.

1.3

Fiscal Decentralization

Articles 356 and 357 of the Constitution of 1991 –later developed by Law 60 of
1993- redefined a scheme of automatic transfer of current income of the
national government to the territorial entities. Many said that with these articles,
the Colombian Constitution was clearly very municipally oriented. These
intergovernmental transferences have a strong component of redistribution,
transferring proportionally larger resources to the poorer territorial entities19.
13

Ibid, p. 427
Medellín, Torres, Pedro; Valdavieso, Llanos, Carlos. “Tendencias y contratendencias en las prácticas políticas en
Bogotá”. In: Rico de Alonso, Ana. (Ed.). Bogotá, Sistema político y cultura democrática. Seminario Internacional.
Alcaldía Mayor de Bogotá. Bogotá, 2003. p. 125-127
15
Merchán Álvarez, Rafael. “Los retos de la gobernabilidad en Bogotá”. In: Op. Cit. Rico de Alonso, Ana. p. 139.
16
Guzmán Pardo, Tania. “Prácticas políticas y relaciones Ejecutivo-Concejo: anotaciones sobre el caso Bogotá”. In:
Op. Cit. Rico de Alonso, Ana. p. 153
17
PNUD, Bogotá una Experiencia Innovadora de Gobernabilidad, marzo 2004, p. 3018
Op. Cit. Guzmán Pardo, Tania, p. 151 y ss.
19
Acosta, Fainboin, Gutiérrez, and Zuluaga. In Relaciones fiscales entre el Distrito Especial de Bogotá y la Nación.
Fedesarrollo. P.151
14

12

Law 60 of 1993 conferred a differential fiscal treatment to Bogotá, recognizing
its double condition of municipality and Special –now Capital- District. Since
then, and later with Law 715 of 2001, the city has received transferences from
the Nation due to this joint character –municipality and Capital District-, and has
been able to collect taxes of municipal20 and departmental21 competence, as
well as having participation in some resources of the Department of
Cundinamarca22. The General System of Transfers (Sistema General de
Participaciones –SGP-) assigns transfer resources, giving priority to
expenditure in education and health care, especially for coverage, as shown in
Figure 3.
Figure 3: Participations in the General Transfers System –SGPParticipations in the
General Transfers System

Special Assignments 4%

School Meals (municipalities and
districts 0.5%)
Riverside- Magdalena River
(municipalities and districts 0.05%)

Distribution by Sectors 96%

General Purpose (municipalities
and districts, 17%)
Education (municipalities, districts,
and departments, 58.5%)

Territorial Pension Funds

Health care (municipalities, districts,

(municipalities, districts, and
departments 2.9%)

and departments, 24.5%)

Indian Reserves (Indian
population in reserves, 0.52%)

Public Health
(municipalities,
districts, and
departments)

Subsidized
regime
(municipalities
and
departments)

Poor population not
affiliated to the
subsidized regime
(municipalities, districts,
and departments)

Source: Introducción a la Economía Colombiana. Mauricio Cárdenas Santa María. Alfaomega – Fedesarrollo. Bogotá,
2007, p. 216

By constitutional reform (Act 01 of 2001), Law 60 was substituted by Law 715 of
2001, which created the General System of Participations –SGP-, composed of
the addition of the resources of the two sources: “situado fiscal” and the
“municipal participations”.

20

Como municipio Bogotá recauda recursos por el cobro de los siguientes impuestos: Predial, Industria Comercio y
Avisos y Tableros, Unificado de Vehículos, Delineación Urbana, Azar y Espectáculos Públicos y la Sobretasa a la
Gasolina y el ACPM motor.
21
Como Distrito Capital Bogotá recauda recursos por el cobro de los siguientes impuestos: Consumo de Cerveza
Sifones y Refajos y Consumo de Cigarrillos y Tabacos elaborados de procedencia Nacional y Extranjera.
22
La participación en el recaudo de los impuestos departamentales de Cundinamarca es en los impuestos de: el
consumo de cigarrillos elaborado de procedencia extrajera y nacional, Registro y anotación

13

Figure 3A. Taxes collected by Bogotá
National
1. Sales Tax (IVA)
2. Income tax
(Renta)
3. Retention at the
source
(Retención en la
fuente)
4. Equity
(Patrimonio)

1.
2.
3.
4.

Departmental
Vehicles
Liquor and beer
Tobacco
Registry (De
registro y
anotación)

District (Bogotá)
Building (Predial)
Vehicles
Industry and Commerce (ICA)
Urban delimitation
(Delineación urbana)
5. Lotteries and entertainment
6. Gasoline Tax (Sobretasa a la
gasolina)
7. Publicity (Publicidad exterior
visual)
8. Tobacco
9. Beer consumption
10. Appreciation (Participación en
la plusvalía)
11. Tobacco consumption*
12. Registry (De registro y
anotación)*
1.
2.
3.
4.

Municipal
1. Building (Predial)
2. Vehicles
3. Industry and
Commerce (ICA)
4. Urban delimitation
(Delineación
urbana)
5. Lotteries and
entertainment
6. Gasoline Tax
(Sobretasa a la
gasolina)

*Participation in taxes collected by
the Department of Cundinamarca

Summing up, Bogotá receives the following direct transferences from the
Nation: mainly from the General System of Participation; But also from the cofinancing funds, from the yielded rents (lotteries and permanent bets), and from
the Solidarity and Guarantees Fund –FOSYGA- destined for health services.
Additionally, the city receives resources from the National Regalías Fund23.
Bogotá received between 7.5% and 8.7% of the total amount transferred by the
Nation between 1994 and 1997, compared to less than 7% of the total in
198824.
The transference regime is not exempt of risks in the future. As mentioned in
2001, the national government promoted congressional approval of a
constitutional reform to decelerate the inertial growth of transferences, which
risked exceeding the country’s fiscal stability. The reform stated that during the
period 2002-200825, the transferences would only grow in a percentage equal to
the inflation, plus an additional 2% at the beginning and later 2.5%, instead of
automatically increasing at the rhythm of growth of the current income of the
Nation, as had been happening. The constitutional reform also stated that the
system would return to the initial model in 2008, once the transition period
ended. At present, the country is expecting a new Constitutional Reform to
extend the period of transition.
As a result of the constitutional reform of 2001, transferences amount to 31.9%
of the Nation’s current income in 200726, down from 47.4% in 2002. That is, in
2008, the nation will transfer 17 billion pesos less (using the value of the peso in
2006). Despite this adjustment, up to this point, Bogotá received increasing
rents due to transferences, as can be observed. Despite of the current
concerns, one could say that up to 2006 the stability that of this revenue source
23

Taken and modified from Acosta, Fainboin, Gutiérrez, and Zuluaga. Op. Cit. P. 147
Op. Cit. Acosta, Fainboin, Gutiérrez, and Zuluaga. P.151
Legislative Act 01 of 2001.
26
Presentation of the District Secretary of Finance in a work table promoted by the “Bogotá Cómo Vamos” on 28 March,
2007.
24
25

14

has been very positive for the city and allowed the city to improve its education
and health systems in the previous years. What could happen in the years to
come remains an open question.
Figure 4: Intergovernmental transferences from the Nation to Bogotá Capital
District
2002-2005,
under Law 715

1993-1991,
under Law 60

1/

Corresponds to 11/12 of period validity + 1/12 of the previous period, includes the 10% value sent to FONPET
Source: Secretary of the Treasure

Figure 5: Direct investment in Education in
Bogotá (Millions of pesos)

Figure 6: Direct investment in the Health in
Bogotá (Millions of pesos)

1.000.000
900.000

500.000

800.000
700.000

400.000

600.000

300.000

500.000
400.000

200.000

300.000
100.000

200.000
100.000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
With national transferences
T. Nación

Source: Budget Spending

With local resources

0
1998

1999 2000

2001

2002

With national transferences
T. Nación

2003

2004

2005

2006

2007

With local resources

Source: Budget Spending

15

Moreover, the Nation relies on Bogotá to collect the following taxes27: income
tax, sales tax, internal and external tariffs, contributions to social security in
health, and the payroll contributions directed at ICBF and SENA. In net terms,
between 1994 and 1998, the District transferred resources that amounted to
23.9% of the district GDP, in average. In 1998 alone, the District transferred
$7.3 billion in net terms, which represent 23.6% of its GDP28.
According to Fedesarrollo29, the present design of intergovernmental relations
at the national level and at the level of Bogotá-Nation, must be reconsidered in
terms of equity and efficiency in the handling of resources.
Efficiency may be endangered because the present framework does not reward
fiscal effort; this could promote fiscal laziness and give rise to enormous
differences in taxes among regions. In addition, important efficiency costs may
arise and consequently, growth and development costs, in cities like Bogotá
where economies of scale and economies of agglomeration are more widely
exploited, and from where important resources are extracted to be transferred
to smaller cities.
Finally, the design of the system of transferences may exhibit information
problems, and discriminate against Bogotá for this reason. Because it is based
on forecasts of several economic and quality of life variables (such as GDP,
NBI, population, etc.), the system may not adequately reflect the fact that some
of these variables exhibit different dynamics in some periods –they grow more
rapidly in large cities than in small ones-. In addition, the system does not take
into account the positive externalities that Bogotá produces for the rest of the
country –such as providing education for the youth of neighboring
municipalities- and which should be compensated for by the Nation. The timely
acknowledgement of the differential evolution of economic and social variables
of Bogotá, and of the positive externalities it generates, should be translated
into greater transferences towards the city.
Presently, the Congress of the Republic is studying a new Project of Law to
modify once again the system of transferences to the regions30; the reasons for
change continue to be the same as in 2001: the fiscal deficit of the Nation and
the desire to strengthen central government. This new project consists on
maintaining the growth of the General System of Participations indexed with
inflation plus a few additional points -4 in 2008 and 2009, 3.5 in 2010, and 3
additional points from 2011 to 2020. If this project were approved, Bogotá would
receive 5 billion pesos less in the next five years 31. This situation would
represent a certain degree of punishment for a city that handles its resources
efficiently, as well as a certain cost in terms of equity, given its important role as
recipient of displaced population in conditions of vulnerability. These issues of
great political importance for the city require study and follow-up.

27

Idem149
Idem. 151
Idem. 161 y 162
30
Acto legislativo 011 de 2006, aprobado por la bancada uribista en primer debate, en la Comisión Primera del Senado
31
“Un año entero sin inversión”. En el Tiempo. Bogotá 29 de marzo de 2007. p. 1-21
28
29

16

1.4

Citizen participation and social control

“Bogotá has several scenarios and spaces of participation… such as the Local
Planning Councils, the Committees for Community Participation in Health, the
Social Policy, Local Councils, the Citizen Veedurías for transparency in the
management of any aspect of the city, committees for development and social
control of public utilities, and many others”32.
According to some authors, “the District has not had the political will or an
integral strategy to promote participation. There has not been a real policy of
participation”33.
On the other hand, it is relevant to highlight several private sector led
institutional experiences promoted directly to advance greater citizen knowledge
of the city’s central administration and of the behavior of the city council.
Projects such as “Bogotá How Are We Doing” (“Bogotá Cómo Vamos”) and
“Council How Are We Doing” (“Concejo Cómo Vamos”), undertaken by a threeparty alliance between Casa Editorial El Tiempo (Bogotá’s major news group,
with investments in newspaper, TV and magazines), the Bogotá Chamber of
Commerce, and the Corona Foundation.
“Bogotá, Cómo Vamos” is a very powerful project created in 1988, to promote
accountability of the Capital District administration. “It is an exercise of periodic
and systematic follow-up of the changes in quality of life, with emphasis on the
Administration’s fulfillment of the Development Plan and the basic indicators
previously agreed upon with the District Administration”34.
The project “Concejo, cómo vamos” also contributes to the review of the
institutional performance of the Bogotá City Council, with emphasis on the
follow-up of attendance and permanence of council members in the council
sessions, and on the study of initiatives promoted by each council member, as
well as the most recognized projects. Its main contribution consists on providing
voters with elements to evaluate the role played by their representatives and by
the Council as a corporation, in the advancement of a shared project for the
city35.

32

Mayor’s Office of Bogotá. Available on the Internet: http://www.bogota.gov.co
Velásquez C. Fabio et al. Op Cit. Pp. 7 and 8
34
“Bogotá, Cómo Vamos”. Available on the Internet:: http://www.bogotacomovamos.org
35
“Concejo, Cómo vamos”. Available on the Internet: http://www.concejocomovamos.org
33

17

CHAPTER 2
BEST PRACTICES IN BOGOTÁ AS A RESULT OF
DECENTRALIZATION
Since the beginning of the decade of the nineties, Bogotá presents significant
advances in the improvement of the quality of life of its inhabitants, as shown by
the important international acknowledgements received by the city in different
areas. Clearly, innovation and the continuity of policies, as well as the
configuration of public-private alliances for the delivery of public goods, have
favored the development of a set of best practices of local governance 36.
Among them, we will review six areas in which the city shows significant
progress: (i) safety and citizen security; (ii) efficiency in public finance
management; (iii) development of urban planning and a long-term urban city
model; (iv) Transmilenio and mobility strategy; (v) recovery of public space; and,
(vi) the revolution in education management.
2.1

Design and Implementation of an Integral Policy for Safety and
security

Since the decade of the nineties, violence and delinquency in Bogotá have
been significantly reduced, as shown by the decrease in the number of
homicides, which fell from close to 80 for each 100,000 inhabitants in 1993 to
22.6 per 100,000 in 200437. This improvement may be attributed in part to an
integral security policy set forth in 1995, in response to the responsibility
assigned to Mayors by the Constitution of 1991 as first authority of the
municipality, made responsible for maintaining and re-establishing public
safety38. Some of the most important characteristics of the security policy set in
motion in Bogotá are the following:
The Mayor’s leadership and the institutional and administrative
organization created for the matter. The Under Secretary for Security and
Citizen Safety, created in 1997, advanced concrete actions of design,
execution, and follow-up of the policy for safety and security39. In addition,
instances for coordination, analysis, data gathering, and decision-making in
terms of safety like the District Security Council, were systematically used. At
the local level, the Local Security Council was the instance in charge of
coordination of this agenda at the lower level.
The use of specialized information systems. The Unified Violence and
Delinquency Information System (SUIVD) was put in place, and became a
proactive and useful tool40. The system helped to identify risk factors and was
36

In 2002, the United Nations Development Program –UNDP-, identified the experience of Bogotá as one of the best
practices in local governance and urban development. The Regional Project of Local Governance for Latin America
documented the experience in the book “Una Experiencia Innovadora de Gobernabilidad Local”.
37
Acero Hugo, Ex subsecretario de Bogotá 1995 – 2003. En artículo “Cómo Bogotá pudo mejorar su seguridad”
38
Estas facultades fueron desarrolladas por la ley 4 de 1991
39
40
The information system receives information from the Metropolitan Police, the Legal Medicine and Forensic Sciences
Institute.

18

very useful to address the specific risk factors in every area of the city and to
correct the formulation of strategies when needed. Some programs and projects
for policy implementation, such as weapon control and alcohol consumption
were a direct result of this information system41.
The implementation of programs related to citizen culture and to a culture
of security. The following programs stand out: citizen participation in the Local
Security Groups, which promote coexistence and safety; the creation of “civil
guides”, to advance citizen controlled activities of respect for the public space;
the implementation of a disarmament program that restricted gun control in the
city in different time periods; programs to reduce alcohol consumption and
promote responsible consumption; the “Hora Zanahoria”, which restricted the
times of sale of alcoholic beverages in public establishments; “Hand the keys”
(“Entregue las llaves”), a program to avoid drunk-driving; and, the recovery of
deteriorated urban areas, adopting the theories of “zero tolerance” 42 and “the
broken window”43, that had been applied successfully in New York by Mayor
Rudy Giuliani.
Technical and infrastructure strengthening of the Metropolitan Police. In
the past decade, there has been an unprecedented increase of investment by
the city administrations in resources for the police44. In addition, there have
been several efforts to bring the police closer to the citizens, such as the
creation of communitarian police and the safe zone program to promote a
culture of security practices in neighborhoods.
The results of all of these strategies were unprecedented advances in crime
prevention and a dramatic reduction of homicide rates that will be shown later in
the document.
2.2

The efficiency of public finance management45

In 1992, the city faced a critical economic situation. The generation of resources
was very low and the city had a high level of debt46. The promulgation of the
Constitution of 1991 and the issuance of the Organic Statute of Bogotá provided
an opportunity to transform the fiscal aspects of the city. Now, the city is able to
finance a substantial part of its investments with its own resources. Moreover,
the city’s debt has received AAA investment grade from Duff & Phelps Credit
Rating Co.

41

The majority of violent deaths in Bogotá occurred at night, especially during weekends. Almost half of deadly victims
of traffic accidents registered high levels of alcohol in their blood.
42
Theory proposed by United States criminologists Wilson and Kelling two decades ago. See: Wilson and Kelling 1982,
Skogan 1990, Kelling and Coles 1996. BID, Sede Buenas Practicas del Departamento de Desarrollo Sostenible, La
caida del crimen en Bogotá; Una década de políticas de seguridad ciudadana. 2004
43
El volcamiento del control policivo hacia las infracciones menores con miras a prevenir la comisión de delitos más
graves. BID, Sede Buenas Practicas del Departamento de Desarrollo Sostenible, La caida del Crimen en Bogotá; Una
década de políticas de seguridad ciudadana. 2004
44
In the past decade, the district’s investment in the metropolitan police has tripled in real terms, from less than US$ 16
million to over US$ 46 million. Ibid p.
45
The city’s finances consist of three large groups: the central administration, public establishments, and Industrial and
Commercial District Enterprises.
46
Secretaría de Hacienda Distrital. Serie de Estudios de Economía y Ciudad. Rojas y Gutiérrez. Descentralización
Fiscal y Financiamiento del la Inversión en Santa Fe de Bogotá D.C. 1990-2001. Bogotá 1999, p15

19

This gradual process of fiscal recovery was mainly due to the possibility
provided to the city by the Organic Statute of issuing its own norms, which led to
increase the generation of resources directed at sustainability. In addition, the
city administration created a model for healthy public finances, and defined its
level of expenditure mainly according to its payment capacity47. Some concrete
results are presented below:
Implementation of a series of strategies for long term sustainability. Fiscal
recovery was attained through the strengthening of sources of tributary income:
creation of new taxes, modification in the collection of existing taxes, and
widening the base for taxing, all of which led to an increase in tributary income
collected by the Central Administration from 1.46% in 1994 to 2.7% of GDP in
200348. Local taxes started at a level of US $200 in 1993 and ended the decade
with a level of US$750. The following stand out among tax reforms: the
establishment of self-valuation as the basis for payment of property taxes, the
tariff increase and the modification of period of collection of the Industry and
Commerce Tax to every two months, the introduction of a payment for capital
gains due to constructions (plusvalia), and the gasoline tax are some of the
measures introduced in the city.
In parallel to the recovery of income, several public entities were liquidated,
capitalized, and restructured, to rationalize operating costs. Thus, operating
costs passed from representing 45% to 30% of the total49, mainly through:
capitalization of the Bogotá Electric Energy Utility and the search of a partner
for its two strategic investments CODENSA (distribution) and ENGESA
(electricity generation); liquidation of the Industrial and Commercial District
Enterprises, such as the Public Utility District Enterprise for Refuse Collection –
EDIS- and outsourcing its services and the restructuring of public entities such
as the Secretary of Public Works and the Secretary of Transit and
Transportation.
Tributary and budgetary strengthening of the administrative organization.
Modernization of the Direction of Taxes and the merging of the District Treasury
with the Secretary of Finance favored rationalization of the city’s tax structure
and evasion control. The creation of the Economic and Fiscal Policy Council –
CONFIS-, the introduction of the Budget System, the Yearly Cash Program for
fiscal programming, and the Expenditure Agreement, among others, also
contributed to budget modernization and to transparency in fiscal management.
The development of a greater tax culture among citizens is another result
that stands out, thanks to the efforts of city administrations to increase
consciousness of the importance of paying taxes for the city’s benefit. The
voluntary tax campaign is a very telling example of the progress in tax culture
and of trust in the public investments of the District Administration: “nearly
63,000 persons paid an additional 10% of housing tax or industry and

47

Vargas Cesar. Diagnóstico “Las Finanzas de Bogotá: El punto de Partida”. Versión preliminar para discusión. Bogotá,
2006 p.1
48
Idid. p. 1
49
Ibid p. 41

20

commerce tax, most of who decided very freely to destine their additional
contribution to social investment programs among several options”50.

Figure 7: Composition of total resources of Bogota (current income, national
government transferences, credit, other capital resources, and transfers of cash
from public utilities of the city and other local investments)

Source: Bogotá’s Secretary of the Treasury

Figure 8: Composition of total expenses of Bogota (current expenses, debt
service, bond payments, and other local investments)

2.3

Definition and development of a long term urban city model

“The history of planning in the city dates back to the second half of the twentieth
century and consisted of diverse attempts to order and guide physical growth
with instruments used in varying degrees, such as road plans, definition of land
use and density, designation of public spaces, and plans of spatial ordering.
Nevertheless, these efforts did not necessarily think of the city as a whole, with
the required complexity, information gathering, and integral vision that a plan
requires”51.

50
51

En PNUD, Bogotá una Experiencia Innovadora de Gobernabilidad, marzo 2004, p. 4
Op. Cit., Cepeda, Ulloa Fernando. p. 433- 434

21

The Constitution of 1991 gave territorial entities the power of territorial
ordainment and ordered the definition of a Territorial Ordainment Plan. In
Bogotá, this plan was defined in 2002, in accordance to the Law of Public
Ordainment at the national level (Law 388 of 1997). This fact, in addition to the
political leadership of the Peñalosa (1997-2000) and Mockus (2000-2003)
administrations52, was used by the city to define a “city model centered on the
construction of public spaces for coexistence” 53 in the short, medium, and long
term. As a result, Bogotá experienced a notable process of urban
transformation.
As a result of this model54, “Between 1998 and 2002, more than two million
square meters of public space were constructed; hundreds of parks were built
and refurbished; 270 Km. of bicycle routes were constructed; over 10,000
elements of public property were installed; more than 135,000 trees were
planted. Public buildings of great social and architectural interest were built,
such as: libraries, schools, a district jail, and the district archive”55. The recovery
of public space contributed to the development of a new, more committed urban
culture, more conscious of the value of public space, and more willing to defend
it. Public attitudes towards public space in Bogotá underwent profound changes
in the past decade. The development and recovery of public space formed a
new citizen ethics, which is more attentive to, and vigilant of the progress
attained, and more ambitious in terms of new projects in this field, all of which
has permitted the construction of a new “culture of what is public” in Bogotá.
In addition to the recovery of public space, rules issued on the use of land in the
Ordainment Law and in Agreement 190, promote a more efficient management
of the use of land, with greater private participation in management and greater
public coordination.
2.4

Mobility Strategy

Transmilenio. “By putting in service Transmilenio, the District Administration
assumes anew its responsibility for planning, organizing, and controlling public
transportation”56. “Transmilenio is an ambitious and articulated public-private
system which contains an infrastructure exclusively for buses, an organized
operation, completely electronic and centralized payment collection, and a
business structure for its operation and control”57.
The system has received international recognition; it has been studied and
copied by several cities nationally and internationally. Transmilenio has

52

Según Martin y Ceballos (2004), “El cambio observado en Bogotá no fue la consecuencia automática del proceso de
descentralización en marcha desde los años ochenta, sino del liderazgo de los alcaldes Mockus y Peñalosa”. Bogotá
anatomía de una transformación, Políticas de seguridad ciudadana 1995-2003, p. 266.
53
54
Los componentes del modelo que hacen referencia a la estructura y manejo del espacio público son: movilidad,
espacio público, vivienda, mejoramiento integral, renovación urbana y proyectos estratégicos. Ibid p. 115
55
Martín y Ceballos; Bogotá anatomía de una transformación, Políticas de seguridad ciudadana 1995-2003, p. 264 y
265.
56
PNUD. Programa de Gestión Urbana, Programa para América Latina y el Caribe. “La transformación de Bogotá,
redefinición urbana y espacial” Quito, Ecuador, 2003. p. 35
57

22

achieved notable improvement in the city’s mobility, in accident reduction, and
in the reduction of air pollution.
The Transmilenio model distributes very clearly the different key functions: the
local government provides all the infrastructure of main routes, stations,
workshops and complementary infrastructure-, the regulatory framework, and
manages the contract. The private sector participates in fee collection –
equipment, fee cards, fiduciary management-, and in the operation of the
transportation service –buses, feeder-buses, employees, companies and
services for the main routes.
Transmilenio on the other hand is a new physical and functional infrastructure
for the organization and operation of collective transportation, which takes into
account the re-definition of roles of the diverse actors related to this topic in the
city.
The district administration: assumed the responsibility for planning,
organizing, controlling, and constructing the necessary infrastructure for
the system’s operation. Moreover, it created a district enterprise called
“Transmilenio S.A.”58, with a small organizational structure, dedicated
to the management and control of contracts with third parties that
operate the system.
The private sector, mainly transporters: dedicated to operating buses
and other areas of the system, under the leadership of the district
administration, which established a system of operation which was put
in place by contracting by public bidding59.
From the regulatory perspective, the most important innovation is the
change from permit to contract. Instead of permission to operate certain
routes, transporters have a demanding service contract to fulfill. The
responsibilities and rights, terms of payment and penalties, are now
much more clearly specified and articulated in the public transportation
contracts, and fiduciary duties and supervised by the public enterprise
Transmilenio S.A.60.
Contracting by public bidding is used for: (i) bus operation; (ii) payment
collection; (iii) control center; and, (iv) the feeder-bus service. Private
sector participation in these activities is intended to guarantee system
efficiency and promote competition and cost awareness.
Although Transmilenio undoubtedly offers advantages for the city, the system
faces important remaining challenges –not yet solved-, such as the need to end
the duality between the traditional collective transportation and Transmilenio,
58

Transmilenio S.A es una “sociedad por acciones de orden distrital con la participación exclusiva de entidades
públicas (ella) tendrá personería jurídica, autonomía administrativa, financiera, presupuestal y patrimonio propio. (le)
corresponde… la gestión, organización y planeación...” La empresa se conformó mediante el acuerdo 04 de 1999
59
TransMilenio es el cambio de la salvaje guerra del centavo por un esquema de competencia organizada a través de
licitaciones públicas… TransMilenio transforma la propiedad dispersa e individual de los buses en propiedad conjunta y
las empresas afiladoras en sociedades por acciones. Tomado de Hidalgo Darío. Artículo “Transmilenio mucho más
que buses rojos y troncales” publicado en El Tiempo, Bogotá marzo 13 de 2006.
60
Ibid.

23

which currently coexist in the city, and duplicate user costs. In addition, an
important amount of resources is required for system maintenance and
enlargement and it is not clear if they could be provided by the national or local
government. Due to its success many other experiences are in place in other
Colombian cities, and national resources have been dispersed. It is also
necessary to make the business more democratic, allowing entry of other
operators in the new phases of the system and prospective system expansions,
small transporters associated in new companies are also needed for a better
approval by all transporters61.
Network of bicycle routes articulated to the streets and roads. This network
acts as a complement to the public transportation system, with the objective of
promoting non-motorized mobilization, which is defined in the Ciclorruta Master
Plan62. Presently, the network of bicycle routes consist of 291 Km., organized in
a main network, a secondary network, and a complementary one.
Rationalization of the use of private automobiles. Aiming to better organize
vehicle transit in the streets63, a program called “Pico y Placa”, restricts
mobilization at certain times during two days of the week. This restriction keeps
approximately 40% of the private vehicles out of circulation every week day 64.
The restriction has been extended to public transportation vehicles one day a
week, according to plate numbers, which rotate from Monday to Saturday.

2.5

Recovery and development of public space

Redefining public space as a fundamental element in the conception of a city
built to human scale is an important strategy advanced by district
administrations since 1995. The strategy was also tied to the goal of generating
a positive perception of the city among citizens; it was organized along the
following lines:
Political management and the redefinition of the public space concept. “In
the first Mockus administration, the issue of public space gained a place with
respect to a serious speech of what is public…, this was later amplified by
Mayor Peñalosa, who converts the public space in one of the elements that
produces equality among citizens”65.
In the redefinition of the concept and its political handling, these mayors also
based their work on studies such as the inventory of the city’s green zones and
the Public Space Booklet, which were used in the Territorial Ordainment Plan of
61

Informe de Desarrollo para Bogotá. El futuro de la movilidad en Bogotá. Reflexiones a propósito del Plan de
Movilidad. Bogotá 2006. p 18 y 19
62
El Plan Maestro de Ciclorruta es una estrategia orientadsa a promover la movilización cotidiana en bicicleta en la
ciudad de Bogotá, con la finalidad de reducir el tráfico y la congestión y lograr positivos dividendos sociales,
económicos y ambientales. En www.idu.gov.co. Consultada el 19 de noviembre de 2006
63
“En 1998, cerca del 95% de la malla vial era utilizada por 850.000 vehículos particulares, que solo movilizaban el
19% de los habitantes… El cinco por ciento restante de la infraestructura víal era utilizada por 21.5800 buses de
servicio público, que realizaban el 72% de los viajes. En Alcaldía Mayor de Bogotá, “Bogotá para todos”, en la Bogotá
del tercer milenio. Historia de una revolución urbana, 2001, p. 122
64
PNUD. Programa de Gestión Urbana, Programa para América Latina y el Caribe. “La transformación de Bogotá,
redefinición urbana y espacial” Quito, Ecuador, 2003. p. 33
65
Martín y Ceballos; Bogotá anatomía de una transformación, Políticas de seguridad ciudadana 1995-2003, p. 269

24

2002. In addition, they used one of the main conclusions of the competitiveness
study done by the Monitor Company in 1994, which noted the positive relation
between quality of public space and city productivity.
Administrative restructuring. The functions of existing agencies such as the
Institute for Urban Development –IDU-, the Popular Sales Fund, the Public
Space Workshop, the District Institute for Recreation and Sports -IDRD-, the
José Celestino Mutis Botanical Garden, the District Administrative Planning
Department –DAPD-, the Administrative Department for the Environment –
DAMA-, and Bogotá’s Water Public Utility –EAAB-, were strengthened and
redefined. New entities with specific functions such as the Urban Renovation
Enterprise and Mission Bogotá were created.
Program and Project design and development, aimed at improving the city’s
physical public space infrastructure, by means of:
Enlargement, improvement, and recovery of the city’s parks, strategic
ecosystems, and recreational and sport infrastructure. A district park system
was created, integrating the neighborhood, local, zone, and district levels.
Strategic buildings were bought and reserved to increase the supply of
green areas. In addition, models for management, maintenance, and
appropriate citizen use, were developed. It is important to highlight the
management performed by several respected Colombian institutions like the
Cajas de Compensación (mandatory family subsidy organizations that
operate on a payroll tax), as well as the activities advanced by the District
Park Sustainability Support Network aimed at increasing citizen participation
in this area.
Recovery, enlargement, and construction of sidewalks and avenues, aimed
at reclaiming public space –which had been mostly invaded by vehicles and
street sales- for the pedestrian. This involved activities such as the creation
of parking lots, as well as the relocation of street sales, through the Popular
Sales Fund.
An urban renovation program66, which adapted certain urban sectors to the
prevailing economic and social conditions67. The intervention strategy was
classified according to the level of sustainability and economic recovery
required by each sector. Examples of urban renovation include the new
configuration of public spaces such as San Victorino, Plaza España, Third
Millenium Park, and the Jiménez Avenue Environmental Walk.
The recovery of marginal areas, aimed at improving urban conditions and
reducing conditions of poverty in zones of the city which were characterized
by having grown in subnormal conditions –lack of public utilities, public
space, and access routes, among others.

66

Definida desde la ley 9 de 1999 como aquellos planes “dirigidos a introducir modificaciones sustanciales al uso de la
tierra y de las construcciones para detener procesos de deterioro fíasico y ambiental de los centros urbanos”
67

25

2.6

The revolution in Education Management

The management of Bogotá’s education sector was significantly transformed by
the passing of Law 60 of 1993. This legal framework gave government entities –
departments, districts, and municipalities-, the autonomous management of
resources coming from the current income and the General System of Transfers
–SGP-. This legal framework gave Bogotá autonomy in the management of the
educational sector. As a certified–authorized- territorial entity, Bogotá received
transfers from the Nation, and was able to administer the service of education68.
According to Law 715 of 2001, the resources for education were assigned
through the General System of Transfers –SGP-, taking into account criteria to
ensure equity and complementation, together with the amount assigned per
student, as well as the reward for results of territorial education management in
terms of coverage and quality. All the municipalities with populations greater
than 100,000 inhabitants were certified in the framework of this law.
For a territorial entity to be certified in education management, it must meet a
minimum of technical, administrative, and financial standards for the
management of education. The certification implies autonomy in the
management of resources assigned, focusing on citizen needs in accordance to
national policy.
Certified territorial entities undertake the following functions: (i) management
and distribution of SGP resources among educational institutions under their
jurisdiction; (ii) direction, guidance, planning, organization, supervision, and
evaluation of the educational service according to criteria defined by the
Ministry of Education to ensure equity, quality, and efficiency; (iii) distribution of
teachers and posts according to the needs; and, (iv) performance evaluation.
The combination of legal factors, political will, and administrative efficiency
warranted achievement of the main function of Bogotá’s Secretary of Education
–SED-: the education of children and youth69. Bogotá’s achievements in matter
of education during the past decade are the result of democratic governance
oriented at human development70. Efficient management of the education sector
is the result of a global strategy for institutional strengthening, consisting mainly
of the modernization of the Secretary of Education –SED-, which was achieved
by planning, evaluation, and continuous improvement71.
A series of strategies were advanced towards improvement of coverage,
quality, and efficiency of education, among these:
Increase in coverage. Using the criterion of coverage-quality-equity, the
enrollment in public schools was increased 37% between 1998 and 2003, which

68

Peña Borrero Margarita. Aprendizajes sobre gestión educativa. La experiencia de Bogotá. 1998-2003. Fundación
Empresarios por la Educación. 2005. p. 101
69
Peña Borrero Margarita. Aprendizajes sobre gestión educativa. La experiencia de Bogotá. 1998-2003. Fundación
Empresarios por la Educación. 2005. p. 102
70
71

26

is equivalent to an average yearly rate of 6.5%72. This is the result of several
complementary actions, including: (i) the enlargement, reorganization, and use
of installed capacity in district educational institutions; (ii) the signing of
agreements with private schools with excess capacity, located in zones of high
demand and deficit of public supply; and, (iii) the construction of new
educational establishments73.
In addition, educational supply was reorganized through the merging of
educational institutions and the resulting distribution of teachers by locality. To
guarantee the permanence of children in schools, certain groups of the
population received subsidies which were conditioned by school attendance;
this is more a national than a local program. There was also a significant
increase in resources for food, transportation, and health insurance 74. The
introduction of food is a new program that showed much better retention rate at
school. There was a discussion as to whether food should be served hot of
cold, in order to build a better sense of community among kids.
Public-private collaboration. The Peñalosa administration devised the
“schools in concession” program75. In this arrangement, 25 large and wellequipped public institutions are managed by recognized private education
institutions of the city, which applied to participate in the program76.
Unfortunately, the program did not attain its goal of 50 schools in concession
because Mayor Garzón, announced in his campaign that he had a different
strategy and fulfilled his promise. Nevertheless, the 25 schools in concession
remain in operation. In the medium term, it will be possible to extract lessons
learned about the real impact of this strategy.
Increase in quality. Since 1998, the district administration designed and
implemented a system to evaluate basic competencies in students of third, fifth,
seventh, and ninth grade in all the city schools, in the areas of mathematics,
language, sciences, and citizen competencies. This system provides guidelines
to define policy for improvement of educational institutions, as well as the action
plans for each institution and for SED.
Since 1997, the strategy for quality improvement has been supported by the
creation of the Educational Excellence Prize to acknowledge the institutions that
exhibit best practices of school management.
The creation of the Network of Libraries –Bibliored- is another example of a best
practice, which “offered learning opportunities beyond the spaces and times
planned in the curriculum, aiming to enrich the cultural capital of students and
72

Peña Borrero Margarita. Aprendizajes sobre gestión educativa. La experiencia de Bogotá. 1998-2003,p. 28
De los más de 240.000 cupos nuevos que se generaron, 505 resultó de la aplicación de parámetros para la
asignación de personal docente; 24% de la adecuación y ampliación de edificaciones escolares, 14% de la celebración
de convenios con colegios privados y 12% de la construcción de nuevos colegios.
74
Entre 1998 y 2003 Bogotá contó con un presupuesto anual promedio de US$350 millones (90% destinado a gastos
recurrentes); 27.855 docentes, 2.345 administrativos; 363 instituciones educativas distritales en 691 sedes y 2.500
centros educativos privados; en el año 2003 había 861 mil estudiantes matriculados (724 mil en instituciones
educativas distritales, 114 mil en colegios privados de convenios, 23 mil colegios de concesión); se otorgaban 179 mil
refrigerios diarios, y se transportaban 25 mil estudiantes en casi 700 rutas escolares. Estos parámetros se siguen
incrementando. En: Ibid. Peña Borrero, Margarita. p. 15.
75
PNUD, Bogotá una Experiencia Innovadora de Gobernabilidad, marzo 2004, p. 167-169
76
Peña Borrero Margarita. Aprendizajes sobre gestión educativa. La experiencia de Bogotá. 1998-2003.p. 57
73

27

their families, as well as the community as a whole”77. Bibliored articulates the
actions developed by four public mega-libraries78 of the city, together with more
than fifty community libraries.
Moreover, REDP was created, supplying 28,000 computers to 336 public
educational institutions, connection to the Internet, and 27,000 e-mail accounts
for teachers.
Efficiency. The efficient management of resources is the result of the
modernization of the Secretariat of Education, together with re-engineering
processes that involved the redefinition of procedures, the creation of a new
organizational structure, and the establishment of coordination and follow-up
mechanisms.
An important component of this process was the establishment of an
information system to support administrative processes and sector planning.
Processes to professionalize human talent were also undertaken, defining
selection, promotion, and evaluation criteria, based on performance.

77
78

Peña Borrero Margarita. Aprendizajes sobre gestión educativa. La experiencia de Bogotá. 1998-2003.p. 29
Biblioteca Luis Angel Arango, Biblioteca Virgilio Barco, Biblioteca El Tintal y Biblioteca El Tunal

28

CHAPTER 3
STRUCTURE AND ECONOMIC PERFORMANCE OF BOGOTÁ

3.1

Economic and industrial profile

The population of Bogotá is 6.7 million persons -16% of the Colombian
population- according to the 2005 census. Bogotá contributes US$ 23,297
million79 to Colombia’s GDP -nearly 22% of the national GDP-, an amount
equivalent to 7% of the Andean Community’s GDP. The city’s PIB per capita is
US$ 3,438, which is higher than the national average (US$ 2.581 per person)80.
In terms of its economic structure, the Colombian capital has an economic
vocation focused on the service industry. This is the most important and most
dynamic sector: in 2002, it contributed 77% of the city’s GDP in traditional
activities such as real estate, financial services, business, community and social
services, public administration, and retail, as well as other more advanced
services such as telecommunications and software. Industry is the second
sector in participation in the city’s GDP -17%-. It includes production of food,
drink, and tobacco; chemical products, textiles and apparel; leather goods; and,
light metal industry (metalmecánica)81.
There are 219,100 firms in the city, 87% of which are micro-enterprises, 12%
are Small and Medium Enterprises –PYMES-, and the remaining 1% are large
enterprises. In 2005, 39% of the city’s firms were classified as belonging to the
commercial sector, and 14% to industry. In general, firms have a moderate
vocation for exports, since only 12% carry out international trade activities82. As
it will be shown later, the Bogotá-Cundinamarca region does not stand out for
its exports at the national level (only 12% of the national exports). On the other
hand, the region has a large incidence in the total of Colombian imports,
amounting to almost 60% the nation’s total.
Bogotá is an important center of employment generation. In 2005, the city
generated jobs for 3,217,165 persons, 49% of who worked in service-related
activities excluding retail, 26% in the commercial sector, 19% in industry, and
5% in construction. Nevertheless, Bogotá is also the city with the highest
number of unemployed persons in the country (471,000 in 2005), and has one
of the highest unemployment rates in Latin America (12.8%), although
unemployment has been falling in a sustained manner83.
To sum up, Bogotá is the most relevant city of Colombia, in social and
economic terms, since it concentrates the highest percentage of the population
and for the value of GDP created at the national level.
79

In 1994 constant US dollars for 2003.
Balance de la Economía Bogotana en el 2005 y en el primer semestre de 2006: 2003 – 2004. Cámara de Comercio
de Bogotá. 2006.
81
Ibid.
82
Ibid.
83
Ibid.
80

29

Figure 9: Bogotá’s GDP composition by sectors in 2003
GDP by Sector in Bogotá, 2003

Transport, Storage,
and communication
9%

Agriculture, forestry,
game, and fishing
5%

Commerce, Repair,
Restaurants, and
Hotels
13%

Social, personal,
and community
services
17%

Construction
5%
Financial and
business services,
and real estate
32%

Industry
16%
Electricity, Water,
and Gas
3%

Source: DANE. Cuentas económicas departamentales 2003.
Calculations: Dirección de Estudios e Investigaciones. Cámara de Comercio de Bogotá.

3.2

Evolution of Industry Structure

According to Table 1, service related sectors and sectors related to the
intermediation of goods increased their participation as generators of GDP
during the period 1990-2003, particularly telecommunications, tourism (hotels
and restaurants), health services, retail, financial intermediation, and education,
among others. In contrast, traditionally important clusters such as industry and
construction have lost participation in the city GDP generation, with a decrease
of 5.5% and 3.5% respectively.
The city’s economic structure has evolved according to the global trends,
reducing value generation in traditional industries, and focusing more on
economic activities based on services.
The above indicates that precisely the service sector -in its more ample
definition- plays a role of enormous importance in the present and future
productivity of Bogotá. This sector is certainly much more relevant than is
usually acknowledged in the public and academic discussions in the city.
Consequently, it is necessary to study the conditions required to generate
greater competitiveness in this sector. Its vulnerability within the framework of a
Free Trade Agreement with the USA should be carefully characterized. It is
equally relevant to understand how to offer better academic education, as well
as the work competencies required in the service area, and to corroborate the
relevance and adequacy of the system of training and vocational work available
in the city in this area. In the short term, it is necessary to understand the basis
for sustainability of this industry.

30

Table 1: GDP by sectors in Bogotá 1990-2003.
CLUSTER

PARTICIPATION PARTICIPATION
GDP 1990
GDP 2003

VARIATION

Agriculture, forestry, game, and
fishing
Mining
Electricity, gas, and water
Industry
Construction
Commerce

0,1%
0,2%
3,6%
22,2%
9,0%
8,5%

0,0%
0,5%
3,3%
16,6%
5,5%
10,2%

0,0%
0,3%
-0,3%
-5,5%
-3,5%
1,8%

Automobile repair services

1,5%

1,4%

-0,1%

Hotels and restaurants
Transportation
Mail and communications
Financial intermediation
Real estate

1,6%
5,7%
3,1%
8,2%
16,6%

2,1%
5,4%
4,4%
11,4%
16,3%

0,4%
-0,3%
1,2%
3,2%
-0,3%

Business services, except financial
services and real estate
Domestic
Marketing schools
Social and health
Associations, leisure, and others

2,9%
0,5%
2,0%
2,4%
2,5%

4,7%
0,4%
2,1%
2,1%
2,2%

1,8%
-0,1%
0,0%
-0,3%
-0,3%

4,5%
1,0%

7,9%
1,6%

3,4%
0,6%

0,9%

1,6%

0,8%

0,3%

0,2%

-0,1%

Public administration and other
community services
Teaching, except marketing
Social and health, not related to
marketing
Associations and leisure, not related
to marketing

Source: DANE. Cuentas regionales departamentales; Calculations by the authors

3.3

Economic growth with respect to the country

Bogotá’s economic performance is directly related to the country’s economic
cycle, but it exhibits a greater volatility than may be observed in the country as a
whole. This means that during periods of growth and economic boom, the
capital city has developed at a faster pace than the rest of the country; while in
economic depressions, crisis are felt more intensely in the capital city, as
dramatically observed in 1999 (see Figure 10).
The average annual growth of Bogotá between 1990 and 2005 84 was higher
than that of the country and its more relevant regions. The city’s total growth
was slightly lower than the country’s growth for that same period (2.78% vs.
2.98%). Nevertheless, during the 2000-2005 periods, Bogotá had a greater
average growth than Colombia (3.66% vs. 3.43%). It is precisely during this
period of time that the city experienced more important progress in terms of
transportation and security improvement (see Table 2).
84

Data source for 2004 and 2005 is the web page of the Chamber of Commerce of Bogotá at
http://camara.ccb.org.co/documentos/2006_12_15_12_1_35_Tablero%20de%20Indicadores%20IV%202006.mht

31

Crecimiento Bogotá Colombia
Figure 10: GDP Growth in PIB Bogota vs. and Colombia 1990-2005
15,00%

10,00%

5,00%

0,00%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
-5,00%

-10,00%

-15,00%
Bogota

Colombia

Source: DANE. Cuentas Nacionales departamentales 1999 – 2003 and Cámara de Comercio de
Bogotá85; Calculations and graph by the authors

Table 2: GDP Growth in Bogotá and Colombia 1990-2005.
BOGOTÁ
AÑO
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Tasa de
crecimiento
1990-2005
Tasa de
crecimiento
2000-2005

COLOMBIA

PIB en millones
PIB en millones
de pesos de 1994 crecimiento de pesos de 1994 crecimiento
12.957.160
56.873.930
13.334.351
2,91%
58.222.935
2,37%
13.876.251
4,06%
60.757.528
4,35%
14.884.447
7,27%
64.226.882
5,71%
16.374.307
10,01%
67.532.862
5,15%
16.807.311
2,64%
71.046.217
5,20%
16.577.703
-1,37%
72.506.824
2,06%
17.120.271
3,27%
74.994.021
3,43%
17.411.812
1,70%
75.421.325
0,57%
15.524.871
-10,84%
72.250.601
-4,20%
16.097.923
3,69%
74.363.831
2,92%
16.311.310
1,33%
75.458.108
1,47%
17.007.295
4,27%
76.917.222
1,93%
17.566.924
3,29%
79.884.490
3,86%
18.304.735
4,20%
83.699.782
4,78%
19.256.581
5,20%
87.989.681
5,13%
2,78%

2,98%

3,66%

3,43%

Source: DANE. Cuentas Nacionales departamentales 1999 – 2003 y Cámara
de Comercio de Bogotá86; Calculations and graph by the authors

3.4

Economic performance of Bogotá and its more dynamic economic
sectors

3.4.1 Productivity
Bogotá’s productivity -measured as GDP per capita- grew a modest 8% from
1990 to 2005, in contrast to the more rapid growth of 13.6% from 2000 to 2005,
which indicates some acceleration in the past five years (see Table 3 and
85

86

32

Figure 11). This strong growth could be explained in part by progress in the
factors that drive competitiveness87, and especially by improvement of the
Colombian economy –which, as shown earlier, is felt more strongly in the city’s
performance. As shown in Table 3, it is also noteworthy that the city’s level of
productivity is between 20% and 27% higher than that of the other dynamic
regions like Antioquia and Valle del Cauca.

Table 3: GDP per capita Bogotá, Antioquia, and Valle in constant US$ of
1994
GDP per Capita in Constant US Dollars of 1994
YEAR
BOGOTA ANTIOQUIA VALLE
1990
3.183
2.466
2.337
3.187
2.364
2.377
1991
3.226
2.414
2.434
1992
1993
3.362
2.478
2.545
3.590
2.503
2.553
1994
1995
3.581
2.603
2.738
3.449
2.578
2.738
1996
1997
3.477
2.656
2.701
3.446
2.535
2.675
1998
2.993
2.436
2.535
1999
2000
3.025
2.538
2.519
3.002
2.487
2.550
2001
2002
3.065
2.573
2.501
3.095
2.659
2.499
2003
3.231
2.747
2.556
2004
2005 provisional
3.335
2.803
2.622
Source: DANE. Cuentas Nacionales departamentales 1999 – 2005
Calculations and table by the authors

PIB PER CAPITA BOGOTA
Figure 11: GDP per capita in constant US$ of 1994

3.000.000

3.500

2.900.000

3.400

2.800.000

3.300
3.200

2.700.000

3.100

2.600.000

3.000

2.500.000

2.900

2.400.000

2.800

2.300.000

2.600

2.200.000

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2.000
2001
2.002
2.003
2.004
2.005

2.700

Pesos Ctes. de 1994

3.100.000

3.600

Dolares Ctes. de 1994

3.700

Source: DANE. Cuentas Nacionales departamentales 1999 – 2003 y Cámara
de Comercio de Bogotá88; Calculations and graph by the authors

87
88

These are dealt with in the section “Drivers of economic performance”.


33

Case study on the performance of Bogotá 1990 2007

Case study on the performance of Bogotá 1990 2007

Recomendados

Recomendados

Mais conteúdo relacionado

Destaque

Destaque (20)

Semelhante a Case study on the performance of Bogotá 1990 2007

Semelhante a Case study on the performance of Bogotá 1990 2007 (20)

Mais de Jorge Hernan Cárdenas Santamaria

Mais de Jorge Hernan Cárdenas Santamaria (20)

Último

Último (20)

Case study on the performance of Bogotá 1990 2007