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Formal and real fiscal federalism in Argentina

Martin Besfamille and Pablo Sanguinetti

CSGR Working Paper No. 115/03

May 2003



In this note we describe, on the one hand, the formal institutional structure of the Argentine fiscal federalism. Then, on the other hand, we show how fiscal federalism really works in Argentina. We analyze data on fiscal behavior of the federal and provincial governments during the nineties. The goal of this note is precisely to point that one of the main issues of the current situation in Argentina is precisely the difference between ‘formal’ and ‘real’ institutions. At the heart of such difference is the lack of enforcement of national laws and formal inter-provincial agreements. We illustrate this by studying how formal rules to the provincial borrowing have functioned during the last decade.

Keywords: Argentina, institutions, enforcement of laws, fiscal federalism, provincial governments, provincial deficits, provincial debts and bailouts.


Address for correspondence:

Departament of Economics
Universidad Torcuato Di Tella
Miñones 2159/77
C1428ATG Ciudad de Buenos Aires

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