Challenges to Fiscal Adjustment in Latin America
Subtitle: The Cases of Argentina, Brazil, Chile and Mexico
Edition: 1 edition
Publisher: Org. for Economic Cooperation & Development
Published: February 23, 2006
Language: eng
Format: Paperback
Number of pages: 168
ISBN-13: 9789264022072
Subjects: Development economics; International economics; International - General; Development - Economic Development; Business & Economics; Business / Economics / Finance; Business/Economics; Economics - General; Business & Economics / International; Business & Economics : Economics - General; Development - General; Finance; Debt relief; Finance, Public; Fiscal policy; Latin America
Description: This volume discusses progress made to date in Argentina, Brazil, Chile and Mexico in putting their finances in order and points out the challenges ahead. It provides an overview of trends and highlights the diversity of fiscal adjustment processes in Latin American countries. It also describes the financial market perspective and role of sovereign debt ratings. The chapter on Argentina debunks the view that fiscal management in the 1990s was irresponsible, arguing instead that the financial crisis was caused by a confluence of costly pension reforms, Brady debt restructuring and the recognition of fiscal "skeletons" in the closet. The chapter on Brazil makes a case for a more entrenched culture of fiscal austerity to make the current achievements sustainable. The Chile chapter describes the role of political cohesiveness following the return of democracy in driving the economy to fiscal rectitude. Finally, the chapter on Mexico discusses different scenarios for debt dynamics and the country’s efforts to contain expenditure pressures.