This paper quantifies the welfare effects of decentralization in Colombia, using a multiregional CGE model. We investigate to what extent will the Colombian Population be better off when goods such as health and education, are delivered locally as against centrally. A provision scheme based on the median voter is coincided. According to the results, the provision of health and education by regional governments improves the welfare of the Colombian Population as a whole, since regional governments provide goods and services in a way that better caters to local preferences. More importantly, these welfare gains vary from 1.3% to 2.3% of GDP, a substantial magnitude especially when compared with the efficiency gains associated to the tax reforms of the early nineties.
