Long-Run Expenditure Constraints in Argentina

Abstract

This article attempts to identify and empirically assess the economic, monetary, financial, and institutional/political factors associated with the behavior of Argentine public expenditures over the 1930-1977 period. Using multiple regression techniques and functional and economic classifications of govern ment spending, explanations are sought regarding the constancy of the secular overall expenditure to GDP ratio and with respect to the changing composition of total outlays. Real per capita GDP and deficit financing exerted an upward pull on the expenditure/GDP ratio, whereas tax revenue constraints and nonelected governments operated m the opposite direction.