Latin American Economic Outlook

OECD Development Centre

Frequency :
Annual
ISSN :
2072-5140 (online)
ISSN :
2072-5159 (print)
DOI :
10.1787/20725140
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The Latin American Economic Outlook is the OECD Development Centre’s annual analysis of economic developments in Latin America. Each edition includes a detailed macroeconomic overview packed with statistics and analysis. Each issue also includes an in-depth look at one sector critical for development in Latin America, taking into account the strategic challenges and opportunities the region will have in the future. A statistical annex and other reference materials fill out the book. The book is supplemented by further content on the website.
Also available in: French, Spanish, Portuguese
 
Latin American Economic Outlook 2009

Latin American Economic Outlook 2009 You do not have access to this content

OECD Development Centre

Authors:
OECD
Publication Date :
28 Oct 2008
Pages :
200
ISBN :
9789264051683 (PDF) ; 9789264039179 (print)
DOI :
10.1787/leo-2009-en

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Are Latin American governments maximising the potential of fiscal policy as a development tool? The 2009 edition of the Latin American Economic Outlook shows that governments in the region could do much more to exploit the ability of fiscal policy to boost economic growth and combat poverty and inequality.

"An important step forward in the dialogue and exchange of experiences between OECD countries and our region." 

-Alicia Bárcena, Executive Secretary, ECLAC

"This publication will provide those concerned with Latin America's future with valuable lessons for fiscal policy drawn from the experiences of OECD and Latin American countries."

-Fernando Henrique Cardoso, Ex-President of Brasil

"This second Latin American Economic Outlook shows the importance of the micro aspects of a proper fiscal policy. The OECD Development Centre has done an outstanding report."

-Guillermo de la Dehesa,
Chairman of the Centre for Economic Policy Research

"Fiscal policy is an axis of the social contract and a key tool in economic and social development.  This is the core message of the OECD Latin American Economic Outlook 2009, a most helpful and timely contribution to the policy debate in Latin America."

-Augusto de la Torre,
Chief Economist for Latin America & the Caribbean Region
World Bank.

"The Latin American Economic Outlook 2009 once again gets it right: fiscal policies in Latin America are actively contributing to macroeconomic equilibrium, but the focus now should also be on economic growth, a necessary condition to reduce poverty and inequality."

-Alejandro Foxley, Minister of Foreign Affairs, Chile

"The OECD Latin American Economic Outlook 2009 highlights the path to follow to continue improving fiscal policy action as a tool for development."  Juan C. Gómez Sabaini, University of Buenos Aires, Argentina

"With this new volume on fiscal policy, the OECD Latin American Economic Outlook continues to enrich our knowledge and debate on the key topics affecting Latin America’s economic and social challenges." 

-Enrique Iglesias,
Secretary-General of the Ibero-American General Secretariat

"This publication illustrates that the challenge ahead for the region is to find out how to use scarce tax resources to foster growth, reduce poverty and provide better public services."

-Henrique Meirelles, Governor, Central Bank of Brazil

"This report urges policy makers to rediscover the potential use of fiscal policy and to make this policy instrument as effective as it can be."

-Vito Tanzi, Former Director,
Fiscal Affairs Department of the IMF

Multilingual Summaries
Also available in: French, Spanish, Portuguese, Chinese

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  • Executive Summary
    Fiscal policy is not just an instrument for macroeconomic management, but also a tool which can be wielded by Latin American governments in the pursuit of development. Thoughtful and active use of tax policy, public spending and debt management can boost Latin America’s development by promoting growth and reducing poverty and inequality.
  • Fiscal Policy and Development
    In his classic book Facundo (1845), Domingo Faustino Sarmiento took stock of his native Argentina, and identified a deep-seated tension at its core: "The nineteenth and twelfth century live side by side: one in the cities, the other in the countryside.""Sarmiento did not mince his words in labelling those two sides of Argentine and by extension Latin American life: they represented civilisation and barbarism1. This striking dualism would exercise a powerful influence on Latin American intellectuals for many decades to come.
  • Recent Trends in Latin America's Fiscal Performance
    This chapter briefly reviews the structure, characteristics and performance of the fiscal system in Latin America. The period examined covers the transition from the years of crisis to the macroeconomic bonanza. It can at most brush up against the current global economic turmoil, but nevertheless provides a solid foundation for understanding where Latin America has been, and where it is going, in matters of fiscal performance.
  • Public Debt, Political Cycles and Capital Markets
    Management of the public debt is a critical aspect of fiscal policy. Emerging countries – and Latin American economies in particular – are faced with a difficult trade-off. Pressing needs in infrastructure and social spending require public borrowing in order to boost development and economic growth, but "high" levels of debt are notoriously costly. Negative perceptions in the public markets about the management of sovereign debt, or the threat of default, increase the vulnerability of public finances and may even slow economic growth. In this context, seeking optimal fiscal rules and good public debt management are critically important to a country’s growth prospects. 
  • Tax Revenues in Latin America
    The influential 19th century Venezuelan thinker Andrés Bello1 wrote of the incipient Latin American nations in 1848: "Their civilisation is an exotic plant that has yet to draw from the ground the juices it needs to sustain itself." Bello’s concern was the new countries’ troubled dependence on European cultural models, and the need for Latin America to declare its cultural autonomy. Perhaps something similar could be said about tax systems in Latin America today.
  • Fiscal Policy and Informality in Latin America
    Informality is difficult to quantify but by any measure it is high in Latin America1. Outside the field of vision of policy makers and out of reach of the taxman’s hand, informal economic activity is a challenge. For the tax authorities it means lost revenue. Perceived as a subsistence sector, these informal workers and micro-entrepreneurs are also a challenge to the effectiveness of public expenditure. Informal work is associated with imperfect labour and social protection for workers, and informal firms are less productive than formal firms. Pervasive informality is therefore potentially a drag on both growth and social cohesion. Moreover, although for some informality represents an active choice, it can become a trap, limiting economic horizons and disconnecting people from the state. Informality is thus much more than merely lost revenue; the existence of a large informal sector points to a high level of social exclusion. 
  • Best Practice in Public Expenditure
    This Outlook focuses on the links between fiscal policy and development and this chapter looks at the spending side of the fiscal ledger. For public spending to contribute to development, policy makers must of course be concerned about quantity – making sure that sufficient resources are available to the programmes that people care about. But they must also grapple with quality – making sure that those resources are wisely spent. Getting both these dimensions of spending right is important to the legitimacy of a country’s fiscal system. 
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