Public Finances, Stabilization and Structural Reform in Latin America

The relationship between macroeconomic developments and the management of public finances played a key role throughout Latin America's economic crisis and subsequent recovery. While in the 1980s fiscal deficits and balance of payments problems went hand in hand, fiscal adjustments and macroeconomic reforms since then have stabilised the economies of many Latin American countries. Public Finances, Stabilisation and Structural Reform in Latin America analyses the connection between these macroeconomic and fiscal developments. The book examines how overvalued exchange rates in the region reduced the base and tax revenues. It also looks at the fiscal impact of specific elements of the reform process, such as decentralisation and privatisation. Studies of four countries Argentina, Chile, Colombia, and Mexico extract long-term trends with respect to the management of public finances, particularly tax systems. However, differences in initial conditions, economic structure, and management of economic and fiscal policy point to the importance of tailoring recommendations to the specific circumstances of each country's economy.