 Macroeconomic challenges of fiscal decentralization in Latin America in the aftermath of the global financial crisisTeresa Ter-Minassian and Juan Pablo Jiménez Macroeconomía del Desarrollo from Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL) Abstract: In Latin America (LA), as well as in other parts of the world, decentralization has increased in recent decades, reflecting primarily political pressures, partly linked to the democratization process. As a result, sub-national governments (SNGs) now account for substantial shares of public expenditures, in particular social and investment ones. This in turn has created growing challenges for macro-fiscal management, as concerns both ensuring medium-to long-term fiscal sustainability, and minimizing the impact of cyclical and commodity prices fluctuations on sub-national budgets. This is illustrated by the effects of the recent global financial crisis on sub-national finances in the region. This paper discusses how fiscal decentralization is affecting macro-economic management in the main LA countries; and which reforms in the existing intergovernmental fiscal systems of those countries could help strengthen their fiscal sustainability, minimize the risk of pro-cyclicality at all levels of government, and create “fiscal space” for active countercyclical responses to economic shocks. Date: 2011-05 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ecr:col037:5344 Access Statistics for this paper More papers in Macroeconomía del Desarrollo from Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL) Contact information at EDIRC. |
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