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Territorial inequality, equalization transfers and asymmetric sharing of non-renewable natural resources in Latin America

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  • Brosio, Giorgio
  • Jiménez, Juan Pablo
  • Ruelas, Ignacio

Abstract

Non-renewable natural resources (NRNR) contribute a large share of tax revenue in Latin American countries; and the fact that these resources are concentrated in just a few regions generates a high level of territorial inequality. This paper aims to analyse how NRNR revenues could be included in equalization grants, and how countries are implementing adequate equalization grant systems, or could do so. Based on fiscal equalization theory, vertical and horizontal systems are evaluated with reference to mid-level governments in Argentina and Peru. The study identifies a variety of political and economic costs for different NRNR revenue systems, where: (i) the provinces own the resources in question (Argentina); and (ii) NRNR revenues are collected and distributed by central government to a large number of subnational governments under a fully asymmetrical scheme (Peru).

Suggested Citation

  • Brosio, Giorgio & Jiménez, Juan Pablo & Ruelas, Ignacio, 2018. "Territorial inequality, equalization transfers and asymmetric sharing of non-renewable natural resources in Latin America," Macroeconomía del Desarrollo 44368, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col037:44368
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    File URL: http://repositorio.cepal.org/handle/11362/44368
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    1. Robin Boadway & Frank Flatters, 2023. "The Taxation of Natural Resources: Principles and Policy Issues," Springer Books, in: Anwar Shah (ed.), Taxing Choices for Managing Natural Resources, the Environment, and Global Climate Change, chapter 0, pages 17-81, Springer.
    2. W. D. Gainer & T. L. Powrie, 1975. "Public Revenue from Canadian Crude Petroleum Production," Canadian Public Policy, University of Toronto Press, vol. 1(1), pages 1-12, Winter.
    3. Brosio, Giorgio & Jiménez, Juan Pablo, 2012. "The intergovernmental allocation of revenue from natural resources: finding a balance between centripetal and centrifugal pressure," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2031.
    4. Letelier S., Leonardo & Neyra A., Gonzalo, 2013. "La economía política de las transferencias fiscales a los gobiernos regionales del Perú," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
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    1. Juan Pablo Jiménez & Leonardo Letelier & Ignacio Ruelas & Jaime Bonet-Morón, 2021. "Reglas fiscales subnacionales: Revisión empírica, experiencias internacionales y sus desafíos en la nueva institucionalidad fiscal post COVID," Documentos de trabajo sobre Economía Regional y Urbana 300, Banco de la Republica de Colombia.

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