Fiscal Responsibility Laws for Subnational Discipline: The Latin American Experience

This paper discusses fiscal responsibility laws in Latin America, with special attention to their provisions for fiscal discipline by subnational governments. It discusses why and when such laws might be useful-to help resolve the coordination problem in getting diverse governments to avoid overusing the common national credit market and to help individual governments make a time-consistent commitment for fiscal prudence. It examines the cases of Brazil, Colombia, Peru, and Argentina, as well as the case of Mexico where other types of laws and regulations aim to achieve the same objectives of solidifying incentives for fiscal discipline at all levels of government. Fiscal responsibility laws are found to be useful in some cases, although the experience is not long enough to be certain, but they are clearly not necessary in every case, nor always sufficient to assure fiscal stability.

Bibliographic Details

Main Author:	Webb, Steven B.
Language:	English en_US
Published:	World Bank, Washington, D.C. 2004-05
Subjects:	ACCOUNTABILITY, AUTHORITY, AUTHORIZATION, AUTONOMY, BANK REGULATION, BANKING SECTOR, BORROWING COSTS, CAPITAL REQUIREMENTS, CAPITALIZATION, CENTRAL BANKS, CENTRAL GOVERNMENT, CENTRALIZATION, CONGRESSIONAL OVERSIGHT, CONSENSUS, CONSOLIDATION, CONSTITUTION, CONSTITUTIONS, CREDIT RATINGS, CREDITWORTHINESS, DEBT, DEBT MANAGEMENT, DEBT RELIEF, DEBT SERVICE, DECENTRALIZATION, DECONCENTRATION, DECREES, DEMOCRACY, DEVOLUTION, DISTRICTS, DOMESTIC BORROWING, EXECUTION, EXPENDITURE, FEDERAL GOVERNMENT, FEDERALISM, FEDERATIONS, FINANCIAL INFORMATION, FINANCIAL INSTITUTIONS, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SYSTEM, FISCAL, FISCAL BALANCE, FISCAL CONTROL, FISCAL CRISIS, FISCAL DEFICIT, FISCAL DISCIPLINE, FISCAL PERFORMANCE, FISCAL POLICIES, FISCAL POLICY, FISCAL PROBLEMS, FISCAL RESOURCES, FISCAL RESPONSIBILITY, FISCAL SUSTAINABILITY, GOVERNMENT BORROWING, INFLATION, INSTITUTIONAL ARRANGEMENTS, INTERGOVERNMENTAL RELATIONS, INTERGOVERNMENTAL TRANSFERS, LAWS, LEGISLATION, LEGISLATORS, LEGISLATURE, LEGISLATURES, LEGITIMACY, LEVELS OF GOVERNMENT, LOCAL GOVERNMENTS, MACROECONOMIC STABILITY, MANDATES, MARKET DISCIPLINE, MINISTRY OF FINANCE, MORAL HAZARD, MUNICIPALITIES, MUNICIPALITY, NATIONAL GOVERNMENTS, NATIONAL LEVEL, PENALTIES, PENSIONS, POLITICAL DECENTRALIZATION, POLITICAL INSTITUTIONS, POLITICIANS, POPULISM, PRESIDENTS, PRIVATIZATION, PRIVATIZATION OF STATE, PROVISIONING, PROVISIONS, PUBLIC FINANCES, PUBLIC SECTOR, PUBLIC SECTOR DEFICIT, PUBLIC SPENDING, RATING AGENCIES, REVENUE SHARING, REVENUE TRANSFERS, SALES TAXES, SAVINGS, SENATE, STATE ENTERPRISES, STATE GOVERNMENT, STATE OWNED BANKS, SUBNATIONAL DEFICITS, SUBNATIONAL FINANCES, SUBNATIONAL GOVERNMENT, SUBNATIONAL GOVERNMENTS, TAX, TRANSPARENCY, VETO FISCAL SYSTEMS, CREDIT MARKET, DEBT MARKETS, LEGISLATION ENVIRONMENT, POLITICAL SYSTEMS, BUDGET PROCESS,
Online Access:	http://documents.worldbank.org/curated/en/2004/05/4966775/fiscal-responsibility-laws-subnational-discipline-latin-american-experience https://hdl.handle.net/10986/14034
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