Nº 19 June 2021

ISSN: 2173-8254

Descentralización, inversión pública y consolidación fiscal. Hacia una nueva geometría del triángulo

Institution: CEPAL-AECID
The first major impact of the international financial crisis of the XXI century has not been as important in Latin America and in other regions of world, if the U.S. or the Eurozone. In favor of Latin America has played the relatively healthy state of public finances , reached after a successful debt reduction process during the last decade of the twentieth century and the first years of the new millennium, obviously with hints for each country. The international financial crisis broke a economic policy paradigm based on financial deregulation, prevalence of monetary policy over fiscal policy and removal of Public sector strategic activities. Stimulus programs tax - and especially those based on increases in investment public - have returned to the forefront of political action , although still many warnings about its effectiveness and its impact on the persist sustainability of public finances. In this general context, the role subnational government , traditionally excluded from the function stabilization has also been revitalized in countries that have driven decentralization . The paper analyzes these parameters , reviewing theory and available empirical evidence . the calculations for a selected sample of nine countries Latin America show some fiscal space , including in the scope of subnational governments . These objective conditions facilitate the implementation of investment policies that can generate economic growth, employment and social inclusion, without compromising fiscal consolidation. In this it is necessary to have effective rules fiscal , mainly based on structural balance and precise definition of the golden rule of investment financing. In short, a new " geometry " for the triangle decentralization public investment and fiscal consolidation.