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Fiscal Rules for Subnational Governments. Some Organizing Principles and Latin American Experiences

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Author Info

  • Mariano Tommasi

    ()
    (Center of Studies for Institutional Development, Fundacion Gobierno y Sociedad & Department of Economics, Universidad de San Andres)

  • Miguel Braun

    (CIPPEC & Department of Economics, Universidad de San Andres)

Abstract

In this paper we investigate the logic and the workings of fiscal rules, with focus on rules for subnational governments. We argue against a simplistic view that sees the writing of numerical limits on fiscal variables as the solution to fundamental fiscal problems. We suggest that international organizations should take a more comprehensive approach when dealing with the fiscal problems of developing countries. Such an approach requires a deep understanding of the determinants of undesirable fiscal outcomes in each particular case, which in turn requires some explicit political analysis.

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File URL: ftp://webacademicos.udesa.edu.ar/pub/econ/doc44.pdf
File Function: First version, 2002
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Bibliographic Info

Paper provided by Universidad de San Andres, Departamento de Economia in its series Working Papers with number 44.

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Length: 42 pages
Date of creation: Mar 2002
Date of revision: Mar 2002
Handle: RePEc:sad:wpaper:44

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Keywords: fiscal rules; subnational governments; Latin America;

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References

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  1. Henning Bohn & Robert P. Inman, 1996. "Balanced Budget Rules and Public Deficits: Evidence from the U.S. States," NBER Working Papers 5533, National Bureau of Economic Research, Inc.
  2. Gonzalez, Christian Y. & Rosenblatt, David & Webb, Steven B., 2002. "Stabilizing intergovernmental transfers in Latin America : a complement to national/subnational fiscal rules?," Policy Research Working Paper Series 2869, The World Bank.
  3. Suzanne Kennedy & Janine Robbins, . "The Role of Fiscal Rules in Determining Fiscal Performance," Working Papers-Department of Finance Canada 2001-16, Department of Finance Canada.
  4. Peltzman, Sam, 1992. "Voters as Fiscal Conservatives," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 327-61, May.
  5. Barry Eichengreen & Ricardo Hausmann & Jürgen Von Hagen, 1999. "Reforming Budgetary Institutions in Latin America: The Case for a National Fiscal Council," Open Economies Review, Springer, vol. 10(4), pages 415-442, October.
  6. Alesina, Alberto & Hausmann, Ricardo & Hommes, Rudolf & Stein, Ernesto, 1999. "Budget institutions and fiscal performance in Latin America," Journal of Development Economics, Elsevier, vol. 59(2), pages 253-273, August.
  7. Mariano Tommasi & Pablo T. Spiller, 2000. "The Institutional Foundations of Public Policy: A Transactions Approach with Application to Argentina," Working Papers 29, Universidad de San Andres, Departamento de Economia, revised May 2000.
  8. Guillermo Mondino & Federico Sturzenegger & Mariano Tommasi, 1992. "Recurrent High Inflation and Stabilization, A Dynamic Game," UCLA Economics Working Papers 678, UCLA Department of Economics.
  9. Besley, Timothy & Case, Anne, 2000. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," Economic Journal, Royal Economic Society, vol. 110(467), pages F672-94, November.
  10. Juan José Echavarría & Carolina Rentería & Roberto Steiner, 2002. "Decentralization and Bailouts in Colombia," IDB Publications 5578, Inter-American Development Bank.
  11. Barry Eichengreen & Jurgen von Hagen, 1996. "Fiscal Policy and Monetary Union: Is There a Tradeoff between Federalism and Budgetary Restrictions?," NBER Working Papers 5517, National Bureau of Economic Research, Inc.
  12. Calvo, Guillermo A. & Mendoza, Enrique G., 2000. "Rational contagion and the globalization of securities markets," Journal of International Economics, Elsevier, vol. 51(1), pages 79-113, June.
  13. James M. Poterba & Kim Rueben, 1999. "State Fiscal Institutions and the U.S. Municipal Bond Market," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 181-208 National Bureau of Economic Research, Inc.
  14. Green, Edward J. & Porter, Robert H., 1982. "Noncooperative Collusion Under Imperfect Price Information," Working Papers 367, California Institute of Technology, Division of the Humanities and Social Sciences.
  15. Mariano Tommasi, 2006. "The Institutional Foundations of Public Policy," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  16. Jones, Mark P. & Sanguinetti, Pablo & Tommasi, Mariano, 2000. "Politics, institutions, and fiscal performance in a federal system: an analysis of the Argentine provinces," Journal of Development Economics, Elsevier, vol. 61(2), pages 305-333, April.
  17. Mariano Tommasi & Matias Iaryczower & Pablo T. Spiller, 2002. "Judicial Decision Making in Unstable Environments, Argentina 1935-1998," Working Papers 30, Universidad de San Andres, Departamento de Economia, revised Oct 2002.
  18. George Kopits & Steven A. Symansky, 1998. "Fiscal Policy Rules," IMF Occasional Papers 162, International Monetary Fund.
  19. Weingast, Barry R & Marshall, William J, 1988. "The Industrial Organization of Congress; or, Why Legislatures, Like Firms, Are Not Organized as Markets," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 132-63, February.
  20. Mariano Tommasi & Sebastian Saiegh & Pablo Sanguinetti, 2001. "Fiscal Federalism in Argentina: Policies, Politics, and Institutional Reform," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  21. Sebastian M. Saiegh & Mariano Tommasi, 1999. "Why is Argentina’s Fiscal Federalism so Inefficient? Entering the Labyrinth," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 169-209, May.
  22. Aaron Tornell, 1995. "Are Economic Crises Necessary for Trade Liberalization and Fiscal Reform? The Mexican Experience," NBER Chapters, in: Reform, Recovery, and Growth: Latin America and the Middle East, pages 53-76 National Bureau of Economic Research, Inc.
  23. James M. Poterba & Jürgen von Hagen, 1999. "Introduction to "Fiscal Institutions and Fiscal Performance"," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 1-12 National Bureau of Economic Research, Inc.
  24. George Kopits & J. D. Craig, 1998. "Transparency in Government Operations," IMF Occasional Papers 158, International Monetary Fund.
  25. Andres Velasco, 1999. "A Model of Endogenous Fiscal Deficits and Delayed Fiscal Reforms," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 37-58 National Bureau of Economic Research, Inc.
  26. von Hagen, Jurgen & Eichengreen, Barry, 1996. "Federalism, Fiscal Restraints, and European Monetary Union," American Economic Review, American Economic Association, vol. 86(2), pages 134-38, May.
  27. Mariano Tommasi & Mark P. Jones & Sebastian M. Saiegh & Pablo T. Spiller, 2002. "Amateur Legislators-Professional Politicians: The Argentine Congress," Working Papers 31, Universidad de San Andres, Departamento de Economia, revised Jul 2002.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Rollo ministro?
    by Lindahl in Finanzas Públicas on 2007-07-19 12:56:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Roberto Cortes Conde, 2008. "Spanish America Colonial Patterns: The Rio de La Plata," Working Papers 96, Universidad de San Andres, Departamento de Economia, revised Mar 2008.
  2. Miguel Braun & Luciano di Gresia, 2003. "Towards Effective Social Insurance in Latin America: The Importance of Countercyclical Fiscal Policy," Research Department Publications 4333, Inter-American Development Bank, Research Department.
  3. Liu, Lili & Webb, Steven B., 2011. "Laws for fiscal responsibility for subnational discipline : international experience," Policy Research Working Paper Series 5587, The World Bank.
  4. Mariano Tommasi, 2002. "Federalism in Argentina and the Reforms of the 1990s," Working Papers 48, Universidad de San Andres, Departamento de Economia, revised May 2002.
  5. Mariano Tommasi & Pablo T. Spiller & Ernesto Stein, 2003. "Political Institutions, Policymaking Processes, and Policy Outcomes. An Intertemporal Transactions Framework," Working Papers 59, Universidad de San Andres, Departamento de Economia, revised Jul 2003.
  6. Canuto, Otaviano & Liu, Lili, 2013. "Subnational Debt, Insolvency, and Market Development," World Bank - Economic Premise, The World Bank, issue 112, pages 1-7, April.
  7. Stéphane Colliac, 2005. "Monnaies parallèles provinciales et fédéralisme budgétaire en Argentine," Revue d'Économie Financière, Programme National Persée, vol. 81(4), pages 251-269.
  8. Mariano Tommasi, 2003. "Crises, institutions politiques et réformes politiques : le bon, le mauvais et l'affreux," Revue d’économie du développement, De Boeck Université, vol. 17(2), pages 49-81.
  9. Bernardo Mueller & Carlos Pereira & Marcus André Melo & Lee J. Alston, 2006. "Political Institutions, Policymaking Processes and Policy Outcomes in Brazil," Research Department Publications 3199, Inter-American Development Bank, Research Department.
  10. Roy Bahl & Eunice Heredia-Ortiz & Jorge Martinez-Vazquez & Mark Rider, 2005. "India: Fiscal Condition of the States, International Experience,and Options for Reform: Volume 1," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper05141, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  11. Miguel Braun & Luciano di Gresia, 2003. "Hacia un sistema de seguro social eficaz en América Latina: la importancia de una política fiscal anticíclica," Research Department Publications 4334, Inter-American Development Bank, Research Department.
  12. Pablo Mendieta Ossio & Hugo Rodriguez Gonzales, 2005. "Interacción de la política fiscal con la política monetaria en el MERCOSUR y países asociados," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 8(1), pages 49-97, December.
  13. Dubravko Mihaljek & Bruno Tissot, 2003. "Fiscal positions in emerging econimies: central banks' perspective," BIS Papers chapters, in: Bank for International Settlements (ed.), Fiscal issues and central banking in emerging economies, volume 20, pages 10-37 Bank for International Settlements.
  14. Emmanuel Abuelafia & Sergio Berensztein & Miguel Braun & Luciano di Gresia, 2005. "Who Decides on Public Expenditures? A Political Economy Analysis of the Budget Process: The Case of Argentina," Public Economics 0511004, EconWPA.
  15. Sebastian Galiani & Iván Torre & Gustavo Torrens, 2014. "Fiscal Federalism and Legislative Malapportionment: Causal Evidence from Independent but Related Natural Experiments," NBER Working Papers 19995, National Bureau of Economic Research, Inc.
  16. repec:idb:brikps:14598 is not listed on IDEAS
  17. repec:idb:brikps:21918 is not listed on IDEAS
  18. Uña, Gerardo & Bertello, Nicolas, 2007. "Situacion Fiscal y Fondo Anticiclico en la Ciudad de Buenos Aires: evolucion y perspectivas
    [Fiscal Situation and Stabilization Fund of Buenos Aires City: evolution and forecast]
    ," MPRA Paper 3198, University Library of Munich, Germany.
  19. Webb, Steven B., 2004. "Fiscal responsibility laws for subnational discipline : the Latin American experience," Policy Research Working Paper Series 3309, The World Bank.
  20. Mariano Tommasi, 2002. "Crisis, Political Institutions and Policy Reform: It Is Not the Policy, It Is the Polity, Stupid," Working Papers 49, Universidad de San Andres, Departamento de Economia, revised Jun 2004.
  21. Roy Bahl & Eunice Heredia-Ortiz & Jorge Martinez-Vazquez & Mark Rider, 2005. "India: Fiscal Condition of the States, International Experience,and Options for Reform: Volume 2," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper05142, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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