Article

Killing Me Softly

Carlos Elizondo and Javier Santiso

in The Oxford Handbook of Latin American Political Economy

Published in print May 2012 | ISBN: 9780199747504
Published online November 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780199747504.013.0018

Series: Oxford Handbooks

 Killing Me Softly

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  • Public Economics
  • Macroeconomics and Monetary Economics

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In Brazil and Mexico, as well as for the region as a whole, there are definitely more social needs than resources to attend to them. This is in part a result of the brutal adjustments in social spending imposed to face the debt crisis of the 1980s. The fiscal adjustments of recent years, however, were not implemented at the expense of social expenditure; in fact, social expenditure per capita increased by 50 percent in the course of the 1990s and remained constant in 1998–2002. This article aims to understand the reasons underlying the paradox of two such similar countries with such different revenue structures and highlights a few implications for public policies. The starting assumption is that the very poor quality of public spending in both countries has made it difficult to use expenditure as a true instrument of justice and development and, in the case of Mexico, to justify greater tax collection. The core problem is the region's fiscal violence, and Brazil's and Mexico's in particular.

Keywords: Latin America; public finance; revenue shortage; fiscal policy; public spending; tax collection

Article.  17450 words. 

Subjects: Economics ; Public Economics ; Macroeconomics and Monetary Economics

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