Economic and Politico-Institutional Variables Applied to the Analysis of Subnational Public Spending in Argentina

Abstract

Using a panel data with fixed effect for the period 1993-2004, we aim at ascertaining whether the participation of public expenditure categories in total public spending of Argentine provinces was influenced by economic, fiscal and politico-institutional variables, such as provinces’ political sign; possibility of reelection of the executive branch; provisions limiting public spending, public debt, or restrictions to the use of credit; and the structure of the legislative bodies. While estimated coefficients for fiscal effort, financial sufficiency, and public debt were significantly different from zero, results fell short of being conclusive for the other variables, except for categorical variables standing for limits on spending and credit use.