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dc.titleFiscal Rules and the Behavior of Public Investment in Latin America and the Caribbean: Towards Growth-Friendly Fiscal Policy?: The case of Argentina
dc.contributor.authorArtana, Daniel
dc.contributor.authorMoskovits, Cynthia
dc.contributor.authorPuig, Jorge
dc.contributor.authorTemplado, Ivana
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageArgentina
dc.coverageLatin America and the Caribbean
dc.date.available2021-02-19T00:00:00
dc.date.issue2021-02-19T00:00:00
dc.description.abstractThis paper analyzes the implementation of Fiscal Rules (FR) in Argentina. Several clear attempts to establish a FR at the national level are identified. The analysis suggests that the environment matters. The only FR that was binding in the period was approved in 2004 during an economic boom, with the country under a program with the IMF and with high political support. During the world financial crisis the expenditure ceilings were relaxed, however, and current primary expenditures soared. Simulations show that a countercyclical fund could have been implemented even after reducing highly distorting taxes at the federal and provincial levels, and at the same time securing a high level of capital expenditure as a share of GDP, had Argentina complied with the 2004 FR. Moreover, an econometric exploration of the link between flexible FRs and public investment finds that a flexible FR helps to mitigate the negative effects of fiscal consolidations on provincial public investment. Based on the previous analysis, guidelines for a proposal for a FR in Argentina are provided.
dc.format.extent52
dc.identifier.doihttp://dx.doi.org/10.18235/0003057
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Fiscal-Rules-and-the-Behavior-of-Public-Investment-in-Latin-America-and-the-Caribbean-Towards-Growth-Friendly-Fiscal-Policy-The-case-of-Argentina.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectFiscal Policy
dc.subjectPublic Investment
dc.subjectTaxation
dc.subjectTax Revenue
dc.subjectFiscal Consolidation
dc.subjectFiscal Rule
dc.subjectGross Domestic Product
dc.subject.jelcodeH54 - Infrastructures • Other Public Investment and Capital Stock
dc.subject.jelcodeE32 - Business Fluctuations • Cycles
dc.subject.jelcodeH50 - National Government Expenditures and Related Policies: General
dc.subject.jelcodeE60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
dc.subject.jelcodeH12 - Crisis Management
dc.subject.keywordsArgentina;public investment;Fiscal Rules
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01188
idb.operationRG-K1198
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