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Public expenditures and debt at the subnational level: Evidence of fiscal smoothing from Argentina

Martin Besfamille (), Nicolás Grosman, Diego Jorrat (), Osmel Manzano Mazzali () and Pablo Sanguinetti

Research Department working papers from CAF Development Bank Of Latinamerica

Abstract: This paper uses the particular features of the tax-sharing regime Coparticipación Federal de Impuestos and the fact that some provinces earn hydrocarbon royalties to investigate public expenditures and debt at the subnational level in Argentina.We obtain that facing a one peso increase in intergovernmental transfers, provinces spend on average 36 cents in public expenditures with no changes in public debt. On the other hand, when royalties increase one peso, 59 cents are used to pay back public debt while public expenditures are not affected. These results, which are robust to many different specifications of the basic regressions, suggest a non-negligeable expenditure/debt smoothing behavior of Argentine provinces.

Keywords: Finanzas públicas; Investigación socioeconómica; Deuda pública; Gasto público (search for similar items in EconPapers)
Date: 2017
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Related works:
Working Paper: How Do Subnational Governments React to Shocks to Revenue Sources? Evidence from Argentina (2019) Downloads
Working Paper: Public Expenditures and Debt at the Subnational Level: Evidence of Fiscal Smoothing from Argentina (2017) Downloads
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