Impact of increased external debt servicing on government budgetary priorities: The case of Argentina

Abstract

As external debt servicing has increased, developing countries have been forced to re-evaluate programs in an effort to curtail government spending. This paper attempts to examine the character of the sectoral adjustments that have taken place (1961–1982) in the main functional areas of Argentinean government expenditures. In general, it appears that social services, particularly education and health along with public administration, have borne the brunt of the government's rising debt service problem. The social sectors have suffered further due to regime changes, with military regimes tending to cut back even more severely allocations to the social sectors than normal debt service constraints would have warranted.