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Colombia - economic aspects of the country's land use
American Journal of Economics and Sociology, The, Dec, 2000 by Fernanda Furtado
Another key element to facilitate its operation is the local autonomy conferred by the legislation. Law 388 states general rules and provisions to the use of the PP, but each municipality is responsible for defining the specific circumstances and ways in which the instrument is to be applied.
Despite these important statutory provisions that tend to guide political agreements on the best use of the instrument for each local situation, there are still fundamental open issues to be discussed and resolved in connection with its implementation. Examples of issues in debate are the ambiguities involved in the definition of which base value to consider in the assessment of the PP. For instance, in areas where previous land use norms authorize development rights that have not yet been fully exercised with respect to some of the properties, it is not clear whether the base value of these land parcels should be calculated according to their highest and best use or to their actual use. If the new master plan or its revision defines additional development rights for this area, the plusvalias (consisting of the difference between the new and the previous value) would be higher in the case of choosing the actual use of these parcels to calculate the base value. However, in this case affected landowners may cl aim that they have acquired the previous development rights, be it by having bought the land with these potential values already capitalized in land prices or just for having made a long-term investment on these lands. On the other hand, if the highest and best use is chosen as the parameter for the base value, this could have perverse outcomes such as encouraging land retention for speculative reasons, which, ironically, is recognized as one of the major problems to be redressed by the application of the PP.
To resolve this and several other political and procedural issues of how to assess affected land, the experience with the CV can be of great help. Some of the lessons of this experience may already be recognized within the scope and design of the new instrument, but it is in the process of implementing the PP that the legacy of the CV can make a real difference.
III
Summary and Conclusions
THE COLOMBIAN EXPERIENCE, and Latin American experience in general, shows that to evolve from the general formulation of a new value capture instrument to its effective use is not an easy process. [11] In the first place, a great range of factors must be considered in the instrument's design. However, that is not alone sufficient to guarantee its successful implementation. Technical, institutional, political and cultural factors can hinder or even stop the process.
The lessons of the Colombian experience with the Contribucion de Valorizacion are cited in the literature as worthy of serious attention by other Latin American countries, due to Colombia's success in overcoming some of the usual impediments in the region to the implementation of such instruments. Furthermore, it must be noted that the Colombian practice has left a legacy that, besides being useful to other countries, may now be of great help to Colombia itself in the process of effectuating the Participacion en Plusvalias. The main points of this legacy are:
