Publication:
Budget Rigidity in Latin America and the Caribbean: Causes, Consequences, and Policy Implications

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dc.contributor.authorOlaberria, Eduardo
dc.contributor.authorHerrera, Santiago
dc.date.accessioned2020-04-09T21:39:41Z
dc.date.available2020-04-09T21:39:41Z
dc.date.issued2020-03-09
dc.description.abstractPolicy makers in Latin America and the Caribbean (LAC) often complain that poor fiscal performance in their countries is a result of a high degree of spending rigidity. Despite being a common complaint, the issue has remained largely ignored by the literature because of the lack of adequate measures of rigidity that allow cross-country and time series comparability. This report helps close this gap by introducing a new measure of spending rigidities that can be easily applied to multiple countries. It focuses on the categories of spending that are naturally inflexible—wages, pensions, transfers to subnational governments, and debt service—and separates them into two components: structural and nonstructural. The structural component is determined by economic, demographic, and institutional fundamentals. The nonstructural component is determined by short-run transitory factors associated with business and political cycles. The degree of rigidity of spending is then proxied by the ratio of structural spending to total spending, with a higher value indicating that spending is driven mostly by factors out of the policy makers’ control. This concept of rigidity was applied to 120 countries for the years 2000–17. The report concludes by discussing several policies to contain the sources of rigidity in the long term, ranging from the importance of deepening the pension reform process to the need of establishing strong fiscal institutions promoting medium-term fiscal planning.en
dc.identifierhttps://documents.worldbank.org/en/publication/documents-reports/documentdetail/181171586472396016/budget-rigidity-in-latin-america-and-the-caribbean-causes-consequences-and-policy-implications
dc.identifier.doi10.1596/978-1-4648-1520-1
dc.identifier.isbn978-1-4648-1520-1
dc.identifier.urihttps://hdl.handle.net/10986/33571
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesInternational Development in Focus;
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectFISCAL POLICY
dc.subjectPOLITICAL ECONOMY
dc.subjectBUDGETARY PROCESS
dc.subjectEXTERNAL CONSTRAINTS
dc.subjectPUBLIC EMPLOYMENT
dc.subjectWAGE BILL
dc.subjectSUBNATIONAL EXPENDITURE
dc.subjectPUBLIC DEBT
dc.subjectDEBT SUSTAINABILITY
dc.titleBudget Rigidity in Latin America and the Caribbeanen
dc.title.subtitleCauses, Consequences, and Policy Implicationsen
dc.typeBooken
dc.typeLivrefr
dc.typeLibroes
dspace.entity.typePublication
okr.crossref.titleBudget Rigidity in Latin America and the Caribbean: Causes, Consequences, and Policy Implications
okr.date.disclosure2020-03-09
okr.date.doiregistration2025-04-07T08:44:25.933131Z
okr.date.doiregistration2025-04-08T16:22:07.368430Z
okr.date.doiregistration2025-04-09T02:54:22.562425Z
okr.date.doiregistration2025-04-15T11:13:50.331815Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Publication
okr.guid181171586472396016
okr.identifier.doi10.1596/978-1-4648-1520-1
okr.identifier.doihttps://doi.org/10.1596/978-1-4648-1520-1
okr.identifier.internaldocumentum211520
okr.identifier.report147546
okr.importedtrueen
okr.language.supporteden
okr.region.administrativeLatin America & Caribbean
okr.region.geographicalCaribbean
okr.region.geographicalLatin America
okr.topicGovernance::Politics and Government
okr.topicMacroeconomics and Economic Growth::Economic Policy, Institutions and Governance
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicMacroeconomics and Economic Growth::Political Economy
okr.topicPublic Sector Development::Public Sector Expenditure Policy
okr.topicPublic Sector Development::Public Sector Management and Reform
okr.unitGMTLC
relation.isAuthorOfPublicationb8257292-3111-5480-90dd-5aeb70e52589
relation.isAuthorOfPublication.latestForDiscoveryb8257292-3111-5480-90dd-5aeb70e52589
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