An estimation of expenditure needs for Argentinian provinces: A structural modeling approach

Abstract

Since 1994 Argentina has failed to honor its Constitution by not passing a law that fully determines intergovernmental fiscal transfers at a national level. This paper uses an innovative structural framework to estimate, and ultimately propose, a new distribution scheme for such transfers. The structural approach allows for the recovery of deep parameters to accurately estimate the expenditure needs for each province, which can then be used to establish the distribution rates that should be assigned to each jurisdiction.