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

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.

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Subject

Finanzas públicas | Investigación socioeconómica | Deuda pública | Gasto público

País / Región

Argentina

URI

https://scioteca.caf.com/handle/123456789/1009

Date

2017-01-30

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6.1 Documentos de trabajo en investigación socioeconómica

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CC-BY-NC
Except where otherwised noted, this item's license is described as CC-BY-NC
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Besfamille, Grosman, Jorrat, Manzano & Sanguinetti (2017).pdf (814.35 KB)

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CAF

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