This study estimates poverty, inequality and socio-economic trends in Colombia's departments. We use the data panel over the period 1993-2007. In this analysis, we suggest a dynamic OLS (DOLS) model to measure poverty, inequality and development trends. Using panel data analysis and cointegration techniques for a dynamic heterogeneous panel the results from DOLS model show variation in the scores across Colombian departments during the sample period. Findings of this analysis should demonstrate that the decrease in poverty and inequality could be achieved through adequate strategies that guarantee development and economic growth with policies concentrated to improve social welfare. JEL: O18, I32, D63, C14, C23. © 2013 by Nova Science Publishers, Inc. All rights reserved.