Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- Abbreviations and acronyms
- Expert panel findings
- Introduction
- Democracy
- Education
- Employment and social security
- Environment
- Fiscal problems
- 5 Fiscal policy reforms in the LAC region
- 5.1 Fiscal policy reforms: an alternative view
- Health
- Infrastructure
- Poverty
- Public administration
- Violence and crime
- Conclusion
5 - Fiscal policy reforms in the LAC region
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- Abbreviations and acronyms
- Expert panel findings
- Introduction
- Democracy
- Education
- Employment and social security
- Environment
- Fiscal problems
- 5 Fiscal policy reforms in the LAC region
- 5.1 Fiscal policy reforms: an alternative view
- Health
- Infrastructure
- Poverty
- Public administration
- Violence and crime
- Conclusion
Summary
Introduction
The LAC region has historically been a fiscal basket case. Since the 1970s, debt crises, hyperinflations, and balance of payments crises have recurred, hampering growth prospects and affecting the welfare of low-income households the most. Furthermore, public spending and the tax system are inefficient and regressive, and fiscal policy is procyclical, augmenting the already high macroeconomic volatility.
Although fiscal reforms in the 1990s combined with high growth and rising commodity prices significantly improved fiscal outcomes after 2004, it is not yet clear that a break with the past has occurred. High debt levels persist and, as I shall show in the next section, an important part of the recent increases in revenue are transitory, while increases in expenditures tend to be permanent. This implies that the structural fiscal balance paints a less rosy picture than current figures, and that a downturn in economic activity could lead to a new bout of fiscal solvency problems.
In this chapter I suggest four reforms to improve fiscal outcomes in the region, and attempt a quantification of the potential impact of these reforms based on the recent literature. The proposals are:
- Type
- Chapter
- Information
- Latin American Development PrioritiesCosts and Benefits, pp. 235 - 273Publisher: Cambridge University PressPrint publication year: 2010