Economic Crisis and Fiscal Reforms in Latin America

Mark Hallerberg () and Carlos Scartascini

No 4697, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: The recent financial crisis has initiated pressures for not only policy reform but also fundamental institutional fiscal reforms. This paper explores the connection between economic crises and fiscal institutional reforms in a region that has experienced plenty of both in recent years, namely Latin America. For that purpose it reviews the literature and provides five hypotheses about why, and under what circumstances, crises would promote reforms. The empirical evidence shows that debt crises make reforms more likely but banking crises on their own, if anything, reduce the pressure for fiscal institutional reforms. Political institutions are also important. If the electoral system encourages the personal vote, the country is more likely to reform. This evidence may become useful for predicting the likelihood of reforms in the developed world.

Keywords: Information and communications technology; Education; Experimental design; Ecuador (search for similar items in EconPapers)
JEL-codes: C93 I21 (search for similar items in EconPapers)
Date: 2011-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Economic Crisis and Fiscal Reforms in Latin America (2011)
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