This paper explores the links between institutional arrangements and fiscal performance in Latin America. We consider four measures of fiscal performance, namely expenditures, the size of fiscal deficits and debt, and the response of fiscal policy to business fluctuations; and two institutional dime...

Full description

Bibliographic Details

Main Authors:	Stein, Ernesto (Author), Talvi, Ernesto (Author), Grisanti, Alejandro (Author)
Format:	Book
Language:	English
Published:	Cambridge, Mass. 1998
Series:	National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 6358
Subjects:	Politik Budget deficits > Latin America Budget process > Political aspects > Latin America Fiscal policy > Latin America Proportional representation > Economic aspects > Latin America Lateinamerika
Online Access:	Volltext
Summary:	This paper explores the links between institutional arrangements and fiscal performance in Latin America. We consider four measures of fiscal performance, namely expenditures, the size of fiscal deficits and debt, and the response of fiscal policy to business fluctuations; and two institutional dimensions, namely, electoral systems and budgetary processes. We find evidence that electoral systems characterized by a large degree of proportionality large district magnitude, tend to have larger governments, larger deficits and a more procyclical response to the business cycle. We also find that more transparent and hierarchical budgetary procedures lead to lower deficits and debt. Contrary to the findings of Hallerberg and von Hagen for European countries, we find no evidence that centralized budgetary arrangements neutralize the potentially adverse impact on fiscal deficits of a larger degree of proportionality of the electoral system.
Physical Description:	40 S. graph. Darst.