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Determinants of Budget Projection Errors in Latin America and the Caribbean

Author

Listed:
  • Jorge Baldrich

    (Department of Economics, Universidad de San Andres)

  • Israel Fainboim

    (International Monetary Fund)

  • Mario Pessoa

    (International Monetary Fund)

Abstract

This paper analyses the effects of two relatively new budget institutions, a Treasury Single Account and a Medium Term Fiscal Framework, on government budget projection errors. We use a new data set covering a panel of 30 Latin-American and Caribbean countries for the years 2010-2014. Our empirical findings show that improvements in these budgetary institutions are associated with a lower probability of having expenditure projection errors as well as with lower levels of both expenditure and revenues projection errors. Other macrofiscal and political variables such as the economic growth rate, the ratio between government expenditure and GDP, the inflation rate, and the President´s election year are also significant determinants of the projection errors.

Suggested Citation

  • Jorge Baldrich & Israel Fainboim & Mario Pessoa, 2017. "Determinants of Budget Projection Errors in Latin America and the Caribbean," Working Papers 131, Universidad de San Andres, Departamento de Economia, revised May 2018.
    • Handle: RePEc:sad:wpaper:131
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    File URL: https://webacademicos.udesa.edu.ar/pub/econ/doc131_0.pdf
    File Function: First version, 2018
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    More about this item

    Keywords

    budget projection errors; fiscal institutions; political economy of budgets;
    All these keywords.

    JEL classification:

    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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