Fiscal responsibility laws for subnational discipline : the Latin American experience
AbstractThis paper discusses fiscal responsibility laws in Latin America, with special attention to their provisions for fiscal discipline by subnational governments. It discusses why and when such laws might be useful-to help resolve the coordination problem in getting diverse governments to avoid overusing the common national credit market and to help individual governments make a time-consistent commitment for fiscal prudence. It examines the cases of Brazil, Colombia, Peru, and Argentina, as well as the case of Mexico where other types of laws and regulations aim to achieve the same objectives of solidifying incentives for fiscal discipline at all levels of government. Fiscal responsibility laws are found to be useful in some cases, although the experience is not long enough to be certain, but they are clearly not necessary in every case, nor always sufficient to assure fiscal stability.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3309.
Date of creation: 01 May 2004
Date of revision:
Urban Economics; Banks&Banking Reform; Public&Municipal Finance; Public Sector Economics&Finance; National Governance; National Governance; Banks&Banking Reform; Public Sector Economics&Finance; Urban Economics; Public&Municipal Finance;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-16 (All new papers)
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