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

Abstract

The econometric analysis based on a fixed effect panel data model for the period 1993-2004, aimed at ascertaining whether the public spending of Argentine provinces was influenced by economic and fiscal variables and also by politico-institutional variables such as provinces´ political sign, governors´ possibility of reelection, structure of legislatures and provisions limiting public spending and public debt or conditioning the use of credit. While estimated regression coefficients for fiscal effort, financial sufficiency, transfers and public debt were significantly different from 0, results fell short of being conclusive for the other variables, except for provincial political alignment with the central government, possibility of reelection and limits upon debt.