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Who Decides on Public Expenditures? A Political Economy Analysis of the Budget Process: The Case of Argentina

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Author Info
Emmanuel Abuelafia (CIPPEC)
Sergio Berensztein (Universidad Torcuato di Tella)
Miguel Braun (CIPPEC)
Luciano di Gresia (Universidad Nacional de La Plata)

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Abstract

The budget process is increasingly considered key for reform efforts to improve fiscal outcomes. In this paper we embark on a political economy analysis of the budget process in Argentina, in the spirit of the IDB project “Political Institutions, Policymaking Processes and Policy Outcomes” in order to understand who determines budget outcomes in Argentina. In particular, we seek to characterize the institutional framework that regulates the budget preparation, approval, implementation and control. Furthermore, we identify which actors are involved both formally and informally in the process at each stage, and seek to understand their incentives and interactions. We find that the President has a de facto role that is much more powerful than what the laws and institutions of the budget process stipulate. However, the rigidity of the budget process, together with other constraints such as macroeconomic shocks, fiscal rules, agreements with International Financial Institutions (IFIs) and the influence of other actors such as governors, legislators and lobbies - have limited the ability of the Executive to substantially modify the budget process. Furthermore, compared with the period of high inflation of 1983-1991, in the past decade we have witnessed dramatic improvements in the institutionalization of the budget process, both in political and administrative terms. These reforms have accompanied a strong improvement in fiscal outcomes in the 1990s compared with the 1980s, and provided some of the tools necessary to limit the depth of the recent crisis and regain macroeconomic stability.

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Paper provided by EconWPA in its series Public Economics with number 0511004.

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Length: 65 pages
Date of creation: 08 Nov 2005
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Handle: RePEc:wpa:wuwppe:0511004

Note: Type of Document - pdf; pages: 65
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Find related papers by JEL classification:
D6 - Microeconomics - - Welfare Economics
D7 - Microeconomics - - Analysis of Collective Decision-Making
H - Public Economics

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References listed on IDEAS
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.:
  1. Pablo T. Spiller, 2003. "The Institutional Foundations of Public Policy: A Transactions Approach with Application to Argentina," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(2), pages 281-306, October.
    Other versions:
  2. 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. [Downloadable!] (restricted)
    Other versions:
  3. 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. [Downloadable!]
  4. Sanguinetti, Pablo & Tommasi, Mariano, 2004. "Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline," Journal of International Economics, Elsevier, vol. 62(1), pages 149-170, January. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. Alejandro Izquierdo & Ernesto Talvi & Guillermo A. Calvo, 2002. "Sudden Stops, the Real Exchange Rate and Fiscal Sustainability: Argentina's Lessons," RES Working Papers 4299, Inter-American Development Bank, Research Department. [Downloadable!]
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  7. Alberto Alesina & Roberto Perotti, 1994. "The Political Economy of Budget Deficits," NBER Working Papers 4637, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. 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. [Downloadable!]
  9. Juan Pablo Nicolini & Josefina Posadas & Juan Sanguinetti & Pablo Sanguinetti & Mariano Tommasi, 2002. "Decentralization, Fiscal Discipline in Sub-National Governments and the Bailout Problem: The Case of Argentina," RES Working Papers 3160, Inter-American Development Bank, Research Department. [Downloadable!]
  10. Jürgen von Hagen & Ian Harden, 1996. "Budget Processes and Commitment to Fiscal Discipline," IMF Working Papers 96/78, International Monetary Fund.
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  11. Miguel Braun & Mariano Tommasi, 2004. "Fiscal Rules for Subnational Governments. Some organizing principles and Latin American experiences," Public Economics 0410004, EconWPA. [Downloadable!]
  12. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD, Economics Department. [Downloadable!]
  13. Edward L. Gibson & Ernesto Calvo, . "Electoral Coalitions and Market Reforms: Evidence from Argentina," IPR working papers 97-17, Institute for Policy Resarch at Northwestern University.
  14. Alberto Alesina & Silvia Ardagna, 1998. "Tales of fiscal adjustment," Economic Policy, CEPR, CES, MSH, vol. 13(27), pages 487-545, October. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Ricardo N. Bebczuk, 2008. "Un modelo de consistencia macroeconómica para Costa Rica," RES Working Papers 2015, Inter-American Development Bank, Research Department. [Downloadable!]
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