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Public Infrastructure Investment and Fiscal Sustainability in Latin America: Incompatible Goals?

Author

Listed:
  • Luis Carranza

    (Universidad San Martín de Porres)

  • Christian Daude

    (OECD)

  • Ángel Melguizo

    (OECD)

Abstract

Latin American countries exhibit a significant gap in infrastructure stocks, due to low and in many cases inefficient public investment, which is furthermore not compensated by private sector projects. In this paper we analyse trends in public and total infrastructure investment in six large Latin American economies, in the light of fiscal developments since the early eighties. We argue that post-crisis fiscal frameworks, notably fiscal rules which are increasingly popular in the region, should not only consolidate the recent progress towards debt sustainability, but also create the fiscal space to close these infrastructure gaps. These points are illustrated in a detailed account of recent developments in the fiscal framework and public investment in the Peruvian case. Les pays d'Amérique latine présentent une lacune importante dans les stocks d'infrastructure, à cause des faibles et nombreux cas d'investissements publics inefficaces, ce qui n'est compensée par les projets du secteur privé. Dans ce document, nous analysons les tendances publiques et total d'investissement des infrastructures dans six grandes économies latino-américaines, à la lumière de l'évolution fiscal depuis les années quatre vingt. Nous soutenons que les cadres de post-crise fiscales, notamment les règles fiscales qui sont de plus en plus populaire dans la région, devrait non seulement consolider des progrès récemment accomplis vers la viabilité de la dette, mais aussi de créer l'espace budgétaire pour combler ces lacunes dans l'infrastructure. Ces points sont illustrés dans un compte détaillé de l'évolution récente dans le cadre fiscal et l'investissement public dans le cas du Pérou.

Suggested Citation

  • Luis Carranza & Christian Daude & Ángel Melguizo, 2011. "Public Infrastructure Investment and Fiscal Sustainability in Latin America: Incompatible Goals?," OECD Development Centre Working Papers 301, OECD Publishing.
  • Handle: RePEc:oec:devaaa:301-en
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    File URL: http://dx.doi.org/10.1787/5kg9xf1ncvzw-en
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    Cited by:

    1. Antra Bhatt & Claudio Sardoni, 2016. "Public Expenditure and Growth: The Indian Case," Working Papers 7/16, Sapienza University of Rome, DISS.
    2. Hakhu, Antra Bhatt, 2015. "Productive Public Expenditure and Debt Dynamics: An Error Correction Representation using Indian Data," Working Papers 15/149, National Institute of Public Finance and Policy.
    3. Sanz Labrador, Ismael & Sanz-Sanz, José Félix, 2013. "Política fiscal y crecimiento económico: consideraciones microeconómicas y relaciones macroeconómicas," Macroeconomía del Desarrollo 134, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Pierre-Richard Agénor & King Yoong Lim, 2017. "Unemployment, Growth and Welfare Effects of Labor Market Reforms," Centre for Growth and Business Cycle Research Discussion Paper Series 232, Economics, The Univeristy of Manchester.
    5. Leno S. Rocha & Frederico S. A. Rocha & Th'arsis T. P. Souza, 2016. "Is the public sector of your country a diffusion borrower? Empirical evidence from Brazil," Papers 1604.07782, arXiv.org.
    6. Enrique Alberola & Iván Kataryniuk & Ángel Melguizo & René Orozco, 2016. "Fiscal policy and the cycle in Latin America: the role of financing conditions and fiscal rules," Working Papers 1604, Banco de España;Working Papers Homepage.
    7. -, 2014. "Multi-dimensional Review of Uruguay. Volume 1: initial assessment," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37080 edited by Cepal, May.
    8. -, 2013. "Perspectivas económicas de América Latina 2014: logística y competitividad para el desarrollo," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1504 edited by Ocde, May.

    More about this item

    Keywords

    Amérique latine; fiscal policy; fiscal rules; infrastructure; infrastructure; Latin America; politique budgétaire;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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