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Public Expenditure in Latin America

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Author Info

  • Benedict J. Clements
  • Christopher Faircloth
  • Marijn Verhoeven
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    Abstract

    This paper examines trends in government spending in Latin America from the mid-1990s to 2006. It also examines key policy issues, including the cyclicality of spending, public investment, public employment, and social expenditures. It finds that primary expenditures have trended upward for the past ten years as a share of GDP, driven by increases in current spending, in particular for social expenditures. Fluctuations in real spending have continued to follow a procyclical pattern. The paper finds that there is substantial scope to improve the efficiency of public investment, public employment, and social spending.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/21.

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    Length: 34
    Date of creation: 01 Feb 2007
    Date of revision:
    Handle: RePEc:imf:imfwpa:07/21

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    Related research

    Keywords: Latin America; Government expenditures; expenditures; expenditure; fiscal policy; public spending; government spending; government expenditure; capital expenditures; public debt; budget rigidities; public expenditure; expenditure policy; social expenditures; expenditure policies; efficiency of government expenditure; fiscal affairs; fiscal performance; expenditure growth; public sector expenditures; fiscal discipline; fiscal rules; budgetary central government; public expenditures; capital expenditure; aggregate fiscal; fiscal variables; expenditure data; fiscal balances; tax base; fiscal adjustment; fiscal contractions; expenditure ratios; fiscal positions; categories of expenditure; fiscal policy rule; fiscal risk; fiscal affairs department; public finance; social security spending; growth of expenditures; primary expenditure; fiscal institutions; central government spending; fiscal risks; tax administration; budgetary institutions; expenditure categories; fiscal affairs departments;

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Alberto Alesina & Guido Tabellini, 2005. "Why is fiscal policy often procyclical?," Harvard Institute of Economic Research Working Papers 2090, Harvard - Institute of Economic Research.
    2. Chu, K.-y. & Davoodi, H. & Gupta, S., 2000. "Income Distribution and Tax, and Government Social Spending Policies in Developing Countries," Research Paper 214, World Institute for Development Economics Research.
    3. Schiavo-Campo, Salvatore & de Tommaso, Giulio & Mukherjee, Amitabha, 1997. "An international statistical survey of government employment and wages," Policy Research Working Paper Series 1806, The World Bank.
    4. Reinhart, Carmen & Kaminsky, Graciela & Vegh, Carlos, 2004. "When it rains, it pours: Procyclical capital flows and macroeconomic policies," MPRA Paper 13883, University Library of Munich, Germany.
    5. Ernesto H. Stein & Ernesto Talvi & Alejandro Grisanti, 1998. "Institutional Arrangements and Fiscal Performance: The Latin American Experience," Research Department Publications 4110, Inter-American Development Bank, Research Department.
    6. Ernesto H. Stein & Ernesto Talvi & Alejandro Grisanti, 1998. "Institutional Arrangements and Fiscal Performance: The Latin American Experience," IDB Publications 6435, Inter-American Development Bank.
    7. Fabrizio Balassone & Maura Francese, 2004. "Cyclical asymmetry in fiscal policy, debt accumulation and the Treaty of Maastricht," Temi di discussione (Economic working papers) 531, Bank of Italy, Economic Research and International Relations Area.
    8. Akitoby, Bernardin & Clements, Benedict & Gupta, Sanjeev & Inchauste, Gabriela, 2006. "Public spending, voracity, and Wagner's law in developing countries," European Journal of Political Economy, Elsevier, vol. 22(4), pages 908-924, December.
    9. Michael Gavin & Roberto Perotti, 1997. "Fiscal Policy in Latin America," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 11-72 National Bureau of Economic Research, Inc.
    10. Talvi, Ernesto & Vegh, Carlos A., 2005. "Tax base variability and procyclical fiscal policy in developing countries," Journal of Development Economics, Elsevier, vol. 78(1), pages 156-190, October.
    11. Gupta, Sanjeev & Verhoeven, Marijn, 2001. "The efficiency of government expenditure: experiences from Africa," Journal of Policy Modeling, Elsevier, vol. 23(4), pages 433-467, May.
    12. Herrera, Santiago & Pang, Gaobo, 2005. "Efficiency of public spending in developing countries : an efficiency frontier approach," Policy Research Working Paper Series 3645, The World Bank.
    13. Erwin Tiongson & Hamid Reza Davoodi & Sawitree S. Asawanuchit, 2003. "How Useful Are Benefit Incidence Analyses of Public Education and Health Spending," IMF Working Papers 03/227, International Monetary Fund.
    14. Indermit S. Gill & Truman G. Packard & Juan Yermo, . "Keeping the Promise of Social Security in Latin America," IDB Publications 59998, Inter-American Development Bank.
    15. Anoop Singh & Martin D. Cerisola, 2006. "Sustaining Latin America's Resurgence," IMF Working Papers 06/252, International Monetary Fund.
    16. Xavier Debrun & Manmohan S. Kumar, 2007. "The Discipline-Enhancing Role of Fiscal Institutions," IMF Working Papers 07/171, International Monetary Fund.
    17. Indermit S. Gill & Truman Packard & Juan Yermo, 2005. "Keeping the Promise of Social Security in Latin America," World Bank Publications, The World Bank, number 7391, October.
    18. Ke-young Chu & Hamid Reza Davoodi & Sanjeev Gupta, 2000. "Income Distribution and Tax and Government Social Spending Policies in Developing Countries," IMF Working Papers 00/62, International Monetary Fund.
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    Citations

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    Cited by:
    1. Magazzino, Cosimo, 2010. "Wagner's law and augmented Wagner's law in EU-27. A time-series analysis on stationarity, cointegration and causality," MPRA Paper 26668, University Library of Munich, Germany.
    2. Vratislav Izák, 2011. "Government Expenditures and Taxes Influence on the Economic Growth (Empirical Analysis)," Politická ekonomie, University of Economics, Prague, vol. 2011(2), pages 147-163.
    3. Regis Bonelli, 2009. "Estado de uma Nação: Textos de Apoio - Estado e Economia: Estado e E Crescimento Econômico no Brasil," Discussion Papers 1393, Instituto de Pesquisa Econômica Aplicada - IPEA.
    4. Vratislav Izák, 2011. "The Welfare State and Economic Growth," Prague Economic Papers, University of Economics, Prague, vol. 2011(4), pages 291-308.
    5. Magazzino, Cosimo, 2010. "Wagner's law and Italian disaggregated public spending: some empirical evidences," MPRA Paper 26662, University Library of Munich, Germany.
    6. Andrés Felipe SALAZAR CUELLAR, 2014. "The Efficiency of Education Expenditure in Latin America and Lessons for Colombia," ARCHIVOS DE ECONOMÍA 011209, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    7. Kevin Gallagher & Roberto Porzecanski, 2009. "China and the Latin America Commodities Boom: A Critical Assessment," Working Papers wp192, Political Economy Research Institute, University of Massachusetts at Amherst.

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