Home Subscribe Login Contact Us Search Journal Articles PFM RSS Feed

PFM Articles Search Journal Articles

Turning a Blind Eye to Policy Prescriptions: Exploring the Sources of Procyclical Fiscal Behavior at the Subnational Level

Author: OSVALDO MELONI
Published in PFM, Vol. 18 No. 3

This paper analyses the fiscal behavior of subnational districts in Argentina over the business cycle. I address two questions. Is the fiscal policy of Argentine districts pro-cyclical? If so, what is the theory that best explains procyclicality? The answers come from the estimation of an error correction model of a panel that spans 23 years and 24 districts. I found that all categories of public expenditures, except for capital ex-penditures, were procyclical. The main sources of procyclicality are the political net-works, changes in the amount of oil, gas and mining grants, federal interventions, and discretionary intergovernmental transfers.

Subscribers: Login to read this article

Guests: Subscribe to PFM, or purchase individual article access for $10.
The article is not available for automatic download. We will email the article to you as a PDF file upon receiving your payment, typically within 24 hours.