Presidents and cabinets: The political determinants of fiscal behavior in Latin America

• Published in: Studies in comparative international development Vol. 39; no. 1; pp. 3 - 27
• Main Authors: Neto, Octavio Amorim, Borsani, Hugo
• Format: Journal Article
• Language: English
• Published: New York Springer Nature B.V 01-04-2004
• Subjects: Cabinets; Comparative analysis; Democracy; Democratic regimes; Development; Development studies; Economic behaviour; Economics; Finance; Fiscal policy; Government Spending; Heads of state; History; Latin America; Political aspects; Political Factors; Political ideology; Political parties; Politics; Presidents; Regimes; Studies; Time series; Latin America
• ISSN: 0039-3606; 1936-6167
• DOI: 10.1007/BF02686313

What political factors drive fiscal behavior in Latin America's presidential democracies? This work seeks to identify the political determinants of the level of public spending and the primary balance of ten democratic regimes in Latin America between 1980 and 1998. We consider, besides the influence of traditional variables such as the government's ideological orientation and electoral cycle, the impact of other institutional and political aspects, such as the legislative strength of the president, ministerial stability, and the degree of centralization of budget institutions. Methodologically, the work is based on a pooled cross-section-time-series data analysis of 132 observations. Our main findings are that presidents supported by a strong party and leading a stable team of ministers--and ones more to the right on the political spectrum--had a negative impact on public spending and a positive effect on fiscal balance, and that the electoral cycle deteriorates the latter. [Publication Abstract]