On the fiscal behavior of subnational governments. A long-term vision for Argentina

Jorge Puig and Alberto Porto

No 4588, Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política

Abstract: This paper analyzes the evolution of subnational fiscal variables in Argentina with a long-term vision. The period covers 1959-2019. The first part shows stylized facts of the main provincial fiscal variables over time. The second part studies the interaction between intergovernmental transfers on the level and the structure of provincial own revenues and expenditures. Econometric analysis, that controls for typical endogeneity problems, indicates that higher transfers do not reduce provincial own revenues and increase public expenditure. Higher transfers also bias the composition of provincial own resources towards non-distortive taxes and towards higher capital expenditure. The remarkable heterogeneity of the subnational governments in Argentina plays a key role when determining the results. As a whole findings might have important policy implications on subnational governments' public finance.

JEL-codes: H25 H29 H41 H71 H77 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2022-11
New Economics Papers: this item is included in nep-pbe and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:aep:anales:4588

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