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Towards Effective Social Insurance in Latin America: The Importance of Countercyclical Fiscal Policy

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  • Miguel Braun

    (CIPPEC)

  • Luciano di Gresia

    (Universidad Nacional de La Plata)

Abstract

Latin America is a volatile, crisis-prone region, with limited and inadequate social insurance. Therefore, the long-term as well as the recent poor suffer significantly during crises. Furthermore, social spending is procyclical in the region, but less so than total spending, indicating that the effectiveness of compensatory social policies designed to protect those vulnerable to crises is constrained by adjustments during recessions. The causes of procyclical fiscal policy lie in the political constraints on saving during expansions, combined with limited creditworthiness during recessions, and enhanced by economic volatility and a low share of automatic stabilizers in the budget.

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  • Miguel Braun & Luciano di Gresia, 2004. "Towards Effective Social Insurance in Latin America: The Importance of Countercyclical Fiscal Policy," Public Economics 0410001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0410001
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    3. Leonardo Gasparini, 2003. "Argentina´s Distributional Failure: The role of Integration and Public Policies," CEDLAS, Working Papers 0001, CEDLAS, Universidad Nacional de La Plata.
    4. Xiaohui Hou & Edit V. Velényi & Abdo S. Yazbeck & Roberto F. Iunes & Owen Smith, 2013. "Learning from Economic Downturns : How to Better Assess, Track, and Mitigate the Impact on the Health Sector," World Bank Publications - Books, The World Bank Group, number 16054, December.
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    6. Franklin Huaita & Manuel Agosín Trumper, 2007. "Why Should Emerging-Market Countries (Still) Concern Themselves With Capital Inflows?," Working Papers wp268, University of Chile, Department of Economics.
    7. Scartascini, Carlos & Stein, Ernesto H. & Tommasi, Mariano, 2008. "Political Institutions, State Capabilities and Public Policy: International Evidence," IDB Publications (Working Papers) 1638, Inter-American Development Bank.
    8. Jalles, João Tovar, 2020. "Social expenditure cyclicality: New time-varying evidence in developing economies," Economic Systems, Elsevier, vol. 44(3).
    9. Scartascini, Carlos & Stein, Ernesto H. & Tommasi, Mariano, 2009. "Political Institutions, Intertemporal Cooperation, and the Quality of Policies," IDB Publications (Working Papers) 1647, Inter-American Development Bank.
    10. Gasparini, Leonardo, 2003. "Argentina's Distributional Failure: The Role of Integration and Public Policy," IDB Publications (Working Papers) 3337, Inter-American Development Bank.
    11. João Tovar Jalles, 2019. "On the Cyclicality of Social Expenditure: New Time-Varying evidence from Developing Economies," Working Papers REM 2019/82, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    12. Leonardo Gasparini, 2003. "Argentina's Distributional Failure: The Role of Integration and Public Policy," IDB Publications (Working Papers) 42798, Inter-American Development Bank.
    13. Carlos Scartascini & Mariano Tommasi & Ernesto H. Stein, 2008. "Un Enfoque Intertemporal Interactions and Policy Adaptability: How Do Political Institutions Work?," Research Department Publications 4594, Inter-American Development Bank, Research Department.
    14. Edit V. Velenyi & Marc F. Smitz, 2014. "Cyclical Patterns in Government Health Expenditures Between 1995 and 2010," Health, Nutrition and Population (HNP) Discussion Paper Series 87885, The World Bank.
    15. World Bank, 2005. "Argentina : Sources of Growth, Seeking Sustained Economic Growth with Social Equity," World Bank Publications - Reports 8329, The World Bank Group.
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    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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