The group explores the political economy of fiscal policy, investigating design and implementation processes, as well as impacts on income distribution and economic performance. We focus on the national economy, as well as other Latin American economies and those outside the region. In particular, we find comparisons with the developed economies useful. In addition to the comparative approach, we take a long-run perspective, which allows us to combine the skills of researchers trained in economics as well as those trained in history. The main lines of investigation focus on the following topics: • The importance of institutional, political, economic and demographic factors in the choice, design and implementation of fiscal policy on the part of governments. • The effects of taxing and spending tools on economic growth and income inequality. • The short and long run relationship between economic growth, on one hand, and income and wealth inequality, on the other. • Public finance topics in Uruguayan economic history, covering periods that allow us discuss the different restrictions on fiscal policy management that operated at different times.
This paper analyses the empirical trade-offs between equity and efficiency of various instruments of welfare state fiscal policies. To this end, we present and estimate different systems of structural equations and their error components through which these fiscal policies affect redistribution and economic growth. The empirical results, obtained by using a panel data of 35 high- and upper-middle-income countries over the period 1980–2014, suggest that not all policies depress economic growth rates. In relation to cash transfer variables, we can observe a significant empirical trade-off of old-age-related transfers. However, we do not find a significant equity–efficiency trade-off for working-age transfers. This variable has only a significant and positive effect in the redistribution equation, but does not affect the economic growth rate. If we consider measures of direct taxes, we find a significant and important trade-off for social contributions, and to a lesser extent for income taxes. We do not find a significant trade-off for capital taxes. These taxes only have a significant and negative unexpected effect on redistribution.
This paper analyses the cyclical fluctuations of public social cash transfers and its components in Uruguay over 1988/Q1 to 2016/Q3. The unobservable cyclical components are extracted from the observable time series using different empirical strategies. The results show that components of public social cash transfers are procyclical and lag the macroeconomics fluctuations. This enables us to say that instead of these cash transfers contributing to stabilizing the Uruguayan economy they have thereby
aggravated the business cycle, and through various expenditure items expose the vulnerable groups of society to more adverse economic conditions
En este artículo se analiza el rol de las transferencias intergubernamentales a partir de un análisis empírico aplicado a un grupo de regiones (departamentos) del Uruguay durante el período 2006-2014.
This paper analyzes the long-term relationship between R&D, innovations and productivity in 400 Uruguayan manufacturing firms during the period 2001 to 2009 based on a modified version of the structural model of Crepon, Duguet and Mairesse (CDM).
This article argues that existing empirical work has failed to adequately deal with this possibility. In light of this, it applies a simultaneous equation model which accounts for the joint determination of these three variables, to a sample of 23 OECD countries.
The construction sector, whether privately or publicly financed, is characterized by potentially large rents and government intervention making it vulnerable to corruption. Consistent with this, both case-study and survey evidence has been provided highlighting the problem of malfeasance in this sector. In this article, we test the proposition that a bigger construction sector is likely to be inimical to clean government based on a panel of 42 countries over the period 1995–2011.
In this paper we consider how government quality mediates the relationship between fiscal decentralization and regional disparities. Previous work has argued that fiscal decentralization has the potential to reduce income differences across regions but that this potential may not be realized because of governance problems associated with sub-national authorities. Our empirical evidence based on a sample of 24 OECD countries over the period 1984 to 2006 lends a measure of support to this idea. We find that fiscal decentralization promotes regional convergence in high government quality settings but, worryingly, it leads to wider regional disparities in countries with poor governance.
In this paper we analyze the mediating role of governance quality in the relationship between fiscal decentralization and regional disparities. Previous work has argued that fiscal decentralization has the potential to reduce income differences across regions but that this potential may not be realized because of governance problems associated with sub-national authorities. Our empirical evidence based on a sample of departments (regions) of Uruguay over the period 1990-2010 lends support to this idea. The empirical results show that fiscal decentralization promotes regional convergence, and this effect is boosted in high governance quality settings.