The financing of subnational governments

Sabaini, Juan Carlos Gómez; Jiménez, Juan Pablo

doi:10.4337/9781781006269.00012

Cited by 4 publications

(2 citation statements)

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“…This argument was more readily opposed by rural and opposition actors, who qualified the export taxes as 'confiscatory' and aimed at compensating over-spending during an electoral year. Indeed, much of the rise in public spending, including cash transfer programmes, transport and energy subsides, housing projects, additional rises in salarieswith real wages estimated to have increased around 70 per cent since 2002benefited the government' support base (Etchemendy and Collier 2007, Richardson 2009, Gómez Sabaini 2019. Elisa Carrió, presidential challenger and leading opposition figure, claimed the government was trying to finance its 'fiscal disorder', in light of the lack of foreign investment and external financing sources (P12 2007(P12 , Perfil 2007a).…”

Section: Crisis Taxes and Re-financing The Statementioning

confidence: 99%

The Politics of Fiscal Legitimacy in Developmental States: Emergency Taxes in Argentina Under Kirchnerism

Barlow

Peña

2021

New Political Economy

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In times of crisis, governments can resort to tax rises and emergency taxation schemes to finance extraordinary needs. These schemes often generate tensions in the fiscal contract between the state and society, as they affect basic definitions regarding who is taxed, for how much, and what for. In the context of developing economies, where available sources of extraordinary rents are limited, dealing with these tensions can be problematic as it involves reconciling questions of fiscal legitimacy with the interests of influential economic sectors. This article analyses these tensions by exploring the case of Argentina in the aftermath of the 2001 debt default crisis, when emergency taxes on agricultural exports were implemented and then expanded under Kirchnerist administrations pursuing a 'post-neoliberal' developmental agenda. However, we argue that the government failed in legitimating this fiscal agreement, resulting in a tax rebellion by the rural sector in 2008 followed by the growing polarisation of the policy in partisan terms. By bringing to the fore the challenges and conflicts involved in legitimating tax collection, the article illuminates an overlooked aspect of the political economy of developmental states, particularly those seeking to enhance state autonomy while pursuing redistributive goals.

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Section: Crisis Taxes and Re-financing The Statementioning

confidence: 99%

The Politics of Fiscal Legitimacy in Developmental States: Emergency Taxes in Argentina Under Kirchnerism

Barlow

Peña

2021

New Political Economy

View full text Add to dashboard Cite

show abstract

“…In many countries, there is a lack of local administrative capacity and profuse fragmentation (local governments that are too small), lack of clear legal frameworks assigning expenditure responsibilities, confusion over revenue sharing (formulas are not clear, discussions over conditionality of the revenue sharing), irresponsible borrowing, and a concerning overreliance on transfers from the central government. As previously noted, Latin American subnational governments have come to rely heavily on transfers from the central government, which helps explain their revenue increases while their own tax resources that have remained stagnant (Gomez Sabaini and Jimenez, 2012). This overreliance on transfers makes subnational governments vulnerable to cuts due to macroeconomic fiscal and economic imbalances (e.g., the 2008 economic crisis triggered significant cuts in central government transfers) or political reasons.…”

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confidence: 98%